Just an FYI, if IMON starts with Frontview set to "never" the remote stays in mouse mode (I think what you referred to as mode 1 - all input from the HID device). The end result is that the pad only controls the mouse, and the mouse/keyboard toggle does not work to switch it into keyboard mode. I think it is frontview that actually changes the mode.
I did some testing and I can make the mouse stick operate in mouse mode with iMon Manger off or I can make it not work at all with iMon Manger off. To achieve this I play around with changing Frontview from Never to Always and back to Never. This turns Frontview on then off. Something in this process sets something else that stays in that state until Frontview is restarted.
Something like that. I do not know what is really going on to put terms to all of that. I say all of that because maybe you can get yours to stop responding to the mouse stick in Notepad when iMon Manger is off by trying this. I do believe that is what cybrmage wants as the state of the stick when iMon Manger is off. I will play around with this more and see if I can come up with some exact steps.
That being said it is confusing that this is the default state we want as when I do get my pad to act like this it makes the keyboard/mouse button not funcion as far as it does not change the mode anymore. To get the button back functioning I have to turn on and off Frontview to make the stick function actually work and toggle when iMon Manger is running.
To be clear it seams to me that when the stick is working correctly to me that a side effect is the stick still moves when iMon Manger is closed.