My guess, and it is a guess, is probably not. I am thinking that the issue is that when inputting the numbers for the dial string, the phone is operating independently of 3CX and therefor the system is not aware of the phone being in use and will send the call to the extension. As the phone has not actually initiated the call (only input of numbers), the phone is not "busy" and will ring. It becomes busy when in a call or DND buttons are engaged. The DND may be dependent on whether its code was programmed to match that of 3CX of it a code is being used to set DND at 3CX If not, the call may still be sent to the phone whereupon the phone may chirp upon receiving the call before it can send the busy response back as a result of the DND. If set at 3CX, then the system will not try and send to the extension as it is already aware of the extension being busy.
The setting you mention in the phone may need to be used in conjunction with some other attribute, so I can only suggest that you get the admin manual for same and see how that function is intended to work. Otherwise, you might need to contact Aastra's support for the answer.