I think their answer is clear. The light checks for a connection between the shell of the XLR connector and pin 1 of the XLR (signal ground). In all of my cables and experience, I always leave the shell un-connected. Sometimes if the solder work is poor (or there are stray strands of the cable shield roaming about in the connector), you will have an intermittent connection between pin 1 and the shell of the XLR. I'd consider anything like that to be a bad cable - open up the shell of the connector and fix it.
Michael


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