If you are in auto hover mode and you descend below 4m your autopilots will disengage automatically without warning.
When you say that the auto pilot button light, stays on after you have turned it off are you sure it's not the altitude hold light that you are seeing?
When you engage autohover, your altitude hold autopilot will also engage, but it does not disengage when you disengage autohover.
Both behavious are just as in the real Ka50 apparently. You can read more on the Sticky thread on this forumn called BS Auto Pilot description and operation