When the looper is selected the overall signal is controlled by the fx level knob. Why is that?
This has to do with the analog-dry-through feature and true bypass:
Basically Flashback is never true bypass when you select looper. The reason why, is that we want it to be "armed" and ready to record as soon as you select the looper. If it was true bypass you'd have to first turn the looper on to active the effect, then turn the recorder on, to actually start recording. Obviously we couldn't be using one press on the footswitch to do both these actions, so we'd have to come up with some way of controlling "looper on" AND "record/stop" using to different footswitch "commands" (for example "press footswitch once to activate looper" and "press and hold to record"), which I hope you'll agree would be very annoying and not very intuitive.
So the bottom line is that no matter how you set the dip switch on the back of the pedal, Flashback will always be in buffer mode when you select the looper. If you have Flashback in TB mode, it'll of course automatically jump back to TB when you select one of the delay types... you should actually be able to hear the relay clicking when you switch between the looper and delays.
The reason why the looper controls the volume of the entire signal in loop mode is because of the analog-dry-through feature. The FX Level pot is an analog pot that mixes the wet signal with the dry AFTER the wet signal has been converted back to analog. In other words, we can't do any clever digital trickery to the wet signal (i.e.turn it all the way up when in loop mode), because the pot is analog. Because the looper is 100% wet and no dry as explained above, this means that the FX level pot controls the overall output of the entire signal.