I think keyset 280 (and Coral itself) works as it have to work. Dial digits are displaying on the second line, and the info about incoming call is displaying on the second line too, thus erasing dial digits in the middle of dialing (BTW, operator can continue dialing, but it isn't s comfortable, you are right).
As for me, you can't beat it. But, to my mind, if you make your operator's phone multiappearance and attendant, it is more important from the business point of view to answer incoming call. Let operator stop dialing and answer the 2nd call, and then dial again.
Does this conflict situation repeat often? I think no. If yes, it gives a good cause to send incoming calls to other operator.