User login appears to fail when Drupal 'Access rules' are used even though it is successful

With ldap_integration Authentication and Data modules enabled and working I used the Access rules feature under Home › Administer › User management and set the following rules:

Access type Rule type Mask
deny username %
allow username %OU=Users,OU=RIS,OU=ORG,DC=iowa,DC=uiowa,DC=edu

When I login to the site with the username kbrautig
(CN=kbrautig,OU=Users,OU=RIS,OU=VPR,DC=iowa,DC=uiowa,DC=edu)
and password, the login is successful. However, a red warning appears stating "The name kbrautig is a reserved username." The login box also persists with my username still filled in and the password field empty. Underneath the login box is the standard user info (username) and under that are the links to "My account" and "Logout". So I have been successfully authenticated and logged into the site, but it appears as though the login failed (to the average user).

This blocks me from using a combination of this great module and the Access rules, which are really handy to use. Note that if I use an Access rule of:

Access type Rule type Mask
deny username %
allow username kbrautig

The the login for the user kbrautig will work and the UI behaves normally (no warning notice and the login box disappears).

Let me know if this should bug report should be filed under the Access rules feature instead. I can perform any testing that you'd like. Please let me know if I can clarify anything.

Thanks