The scenario described is a "feature" of the part in which the part hardware automatically generates SE0s. This feature was implemented specifically as a means of preventing babble in hub applications. For the most part, this behavior has been successfully implemented with no ill effects. However, in some host environments and in non-hub applications, we have seen a few problems with the automatic SE0 generation.
The good news is that the auto-SE0s can be disabled. This can be accomplished by writing a 10h to register F2h. The register located at F2h is an undocumented register, but it suffices to say that performing this write will disable the SE0s.