I am not sure if it is a bug or is intended to be honest with you, nor can I tell you if it happens with all HD audio or just lossless formats (such as PCM 5.1), which is what I had issues with. As I have been packing to dvd-5 almost exclusively, it automatically checks the remove HD audio and you cannot unselect it. Because of that, I can not tell you anymore based on my limited experience other than certain audio tracks, such as PCM 5.1, would not let you pack it at all and dvdfab certainly did not seem to be interested in further compressing the video to allow it to fit on a DVD-5, which is asking a lot to begin with.
I suspect you are facing a similar issue, though you are using a much larger target media. You are right, however. If the audio cannot be compressed or the user does not want it compressed, the software's immediate response should be to further compress the video. For me, I'd rather trade the audio than video, but for you (esp. considering target media size) I can see why you would want to sacrifice a little video quality to save the audio quality. Sorry I couldn't be more helpful other than to potentially help you target the problem.
As an afterthought: I do believe that I have also run across threads that suggest that full disc compression does not generally work with the BR copy at this juncture and that movie only backup and compression (if necessary) works much better. Unless you are really sold on having all of the menus and extras on your backups, you might be better of simply trying to backup the movie alone, which will also help you retain both video and audio quality.