your understanding is not wrong... but the reason it does that is because the shaft opening in the plastic knob is too deep... so pushing the knob doesnt work since the knob is already touching the body of the guitar...
many users simply wad up a bit of paper like a straw wrapper or whatnot and stick it under the knob... problem solved...
(i'd still call and ask for a replacement knob, as it makes sense to do so...)
most of the frustration you read on here is people assuming the worst as they work to the root of the issue.
you have valid concerns, i'm just trying to add to your knowledge.
If this is true then that will alleviate my concerns about the selector knobs. You should make a "sticky" thread for this topic here on this site.
Thanks again. This is very helpful.