Hi Bob,
 
Sounds normal and very much like my K2.
The RF gain in the K2 is really an IF gain with the front end RF gain  set at 
a constant level and only affected by switching in the preamp or the  
attenuator. I have an old JRC receiver where the RF gain works the  same as the 
K2 in 
that the effect as the RF gain is turned down is the  lower level signals 
fall below the threshold as the S meter rises and are  effectively suppressed. 
This is a useful effect to give arm chair copy of  stronger signals and 
minimises the amount of noise between syllables.
 
Bob, G3VVT
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