So if you go to the set and press intercom then press FWD/DND and dial 5165 it doesn't turn on FWD B/NA 165 on the set? I believe what you are using is how you program a button for FWD/DND there is already a stock FWD/DND button on the phone. And by default it is not programmed for any function. 5165 will set it for Busy/No Answer to extn 165.
And if you have anything funky on the button 790 will clear it.

I've never had any problem with the dos software in interactive mode. Batch is only used to program the system offline and then upload the programmed file to the system. Check your version of the ea1232 they are backward compatible but there was a version for -0 systems.