If I connect 2 discrete inputs (to mono and stereo in jacks) and the 2 outputs to different amps, and then turn on the Hall of Fame Reverb, the instrument plugged into Stereo In is not only heard from the amplifier connected to Stereo Out but also the one connected to Mono Out. It mixes both the channels together.
Is this normal behaviour or is this a problem with my unit?
When you use the STEREO input, the pedal senses a second input and "thinks" that you are now in Stereo mode and not in Dual Mono mode (which does not exist in the pedal) . This means that the effect might bounce on the other side of the source input (depends on the effects). if you feed the "stereo" input only. The right way is to feed with a stereo dry signal on both inputs.
So this is absolutely normal and the unit is not defective.