There's no bug - just poor documentation.
Anyway, Darrell - if you want frequencies below 60 sent to the sub, and above 60 to mains, then set the mains to SMALL, crossover to 60 and sub to LFE, and use STEREO or STANDARD modes. As simple as that.
"DIRECT" mode means direct - ie no bass management. So the mains won't have the 60Hz crossover, and will get full-range signals. The only way to get sub output with non-LFE material in DIRECT mode is to set LFE+MAIN, duplicating some bass from the direct mains.
If you want your mains to have a 60Hz crossover, then you don't want DIRECT mode.
It's clear that Denon's documentation and menu structure is poor, because in my years on this forum it's always Denon owners who get confused about sub output like this. But the Denon kit appears to work fine, as long as you select the right options.