3) The Battery Monitor implementation seems a little sensitive to what it wants. Had tons of "initialization error" nags. What ended up working was just channel 1 enabled, with Battery Monitor enabled, and the Battery Monitor on 1.
Which is probably related to the fact that only one of the Accent LEDs is actually set up (your switch). If Diamond checks all Accent LED terminals and notices that there is an active monitor, but it's not wired to an LED, you may get those errors. However, I don't know exactly if Diamond really does that... Did you try to activate all other Accent LED's after assigning the monitor to Ch1? If not, could you do that and check if it gives you that error again?
4) But many of my problems stemmed from not understanding how the battery monitor is actually supposed to work. While the documentation says "If you assign an accent LED to the battery monitor, you can no longer use that accent channel for anything else." implies how it works, I thought that it would not affect the power button, that the power button would be illuminated until the power got low, and then the button would start to flash. But no, it is the opposite. If the Battery Monitor is enabled on the power button, it remains off until a low power situation occurs, then starts blinking
Actually, this is exactly what the documentation tells you - it can't be used for anything else, meaning it does neither control brightness of any LED assigned to that channel nor anything else. No switch LED, no main or (in case of cross-guard sabers) side LED. It just checks the battery status and once it's low, the monitor's circuit is closed (in your case you see the switch LED flashing). Otherwise it's open.
But you're right, it would be less confusing if the documentation is more distinct regarding the way the monitor works, i.e. that it's a N(ormally)O(pen) kind of circuit, resulting in unlit LEDs assigned to the monitor and not a N(ormally)C(losed) circuit.
