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Sharp-eyed readers at MyNokiaBlog have noticed that the Windows flag on the Nokia Lumia 925 appears to light up when the handset is off some times, suggesting the button is acting as a notification light. This video is from the Phonedog.com review of the handset.
The flashing light can clearly be seen in the video above, on the white Nokia Lumia 925 with the yellow case.
The manual for the phone is not very helpful in clearing up the mystery, but what is very clear is that it is a real phenomena.