I just wanted to let you know that I have reported this behavior to engineering (CAR# 3VEGOSQQ) for further investigation. A possible workaround, while not the most elegant, is to use a shift register as a flag for ignoring certain events. When you use a local variable, you could write a 2 to the shift register, and then for each subsequent event, ignore the usual event code and decrement the shift register until the shift register reaches 0 again.
Thanks for the superb example VI and the feedback!
Thanks for the follow-up and the suggestion.
Because I only had to reject the last 3-way switch option under specific conditions in my application, the workaround I implemented was to change the Data Range Maximum property from a value of 2 to a value of 1 and to set the DisabledItems property =  when conditions called for this option to be disallowed. Your suggested workaround would be a good solution if the middle option had to be disallowed in certain situations.