This is perfectly normal. The Gain knob is actually adjusting the gain created by the preamp circuit. The minimum setting, with the pad off, creates about 15db of gain. The maximum setting creates about 60db of gain. Some microphone preamps choose to have an input or output fader instead of true gain control (for good reasons that are too technical to go into here) which could create a zero-output. For the VMS-ONE a true gain control was selected.
The Gain knob is all the way down and I still hear signal!
Jesse
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