It's not always just pilots who don't understand the operation of transponders.
I recall bimbling in the local area a few years ago when ATC asked the pilot of another aircraft to "Squawk standby" because of apparent erroneous position and altitude information from his transponder return.
The pilot, whose voice I recognised as that of the club CFI, acknowledged the request and confirmed that he was "squawking standby"
A short while later ATC called again and said that his transponder was still providing spurious information and repeated the request for him to sqawk standby.
The CFI said that he had been on standby ever since the first request, but that he would now switch the transponder off altogether.
The controller then became very irate and said that the phrase "squawk standby" means "turn your transponder off!"
The CFI, ever polite, remarked that he would be telephoning the controller for "educational purposes" once he got back on the ground.