I have had a similar issue with my DZ-1000 switch machines. If I recall, the red LED would stay lit although there were no trains in the area. I contacted Z-Stuff and was told the issue resides in the diode (red LED). They sent new LEDs and this fixed the problem. However, when I had the same problem with a different switch machine, I simply removed the LED. An explanation was never provided, so hopefully your issue will shed some light (no pun intended).
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