With firmware 2.05+ can you please try to adjust the max level to 95 or 90% as a test? The traveler circuit may be getting overloaded and messing with the 3-way dumb switch toggle detection.
I set the max to 90% and it seems more reliable now (didn’t get anything in maybe ~40-50 toggles). It did seem a bit more reliable on 2.08 than 2.00, but I could still get it to happen maybe every 1 in 10 toggles.
It’s in on/off mode, not dimming, does the max% still do something?
Shouldn’t because it should output max voltage. Guess you could try SBM as a science experiment.
The current versions of firmware and driver do support setting a Max Level in on/off mode. But it doesn’t support a Min Level (which makes no sense in non-dimming mode)
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Interesting because when we were going through beta we reported the issue in on/off mode that you could dim the output power via device manager and thought it was agreed to prevent that from happening. Now it sounds like that is back in the firmware/driver.
We might as well stop calling this an on/off switch if people can lower the percentage while in on/off mode. It’s really becoming a dimmer with 88% output or whatever you want in on/off mode.
Well, it’s still just On or Off. Holding the up or down paddles does not change the level at the switch. Also, Set Level commands from a hub do not change the voltage output. A level of 0 is ‘off’ and any non-zero level is ‘on’ at the configured Max Level percentage
Ehhh still sounds like a dimmer.
Yep, a dimmer with only two states: On or Off 
I was very frustrated and had this same issue with one of my switches in the same configuration this weekend (3-way dumb on/off).
I opened up all the boxes again and made sure I made zero mistakes wiring them, and I even measured the Blue and the Dumb switch voltages in all switching states.
Found this thread then. Updating to 2.08 and setting the max level to 200/255 stopped the flashing…