"Can ignore flood limit" permission not taking effect

The "Can ignore flood limit" permission does not seem to be taking effect. If I assign a flood limit of 60 seconds, or any amount for that matter, and give either certain groups or all registered users, but not newly registered users, the afore mentioned permission the flood limit error is still displayed.

This permission can actually be used as a tool to deter automated SPAM software from creating excessive SPAM posts so getting it to work correctly would be a plus.