I don't think this is a malfunction - i think it must be a design "feature" of this particular power supply. Or perhaps it's the way they are powering off... typically, you would not shut off a server by flipping the switch on it's power supply. you'd issue a shutdown command in the OS and have it gracefully shut the system down. I don't think that is possible with the S2 as the ATX motherboard cable is not utilized. it's really unfortunate that the BBB board was not powered by the ATX motherboard cable - that would have gotten rid of the "paperclip" mod and perhaps made it possible to gracefully power on and off with a soft button the front of the case.
But the way it's designed, when you flip the power supply off while the case is open, i see the system power off then, after about .5 sec, it powers on for just a fraction of a second. a little blip.
Perhaps this blip is causing two problems - corrupts the SD card, and trips something in the power supply that stops it from powering back on for several minutes.
I'm very interested in hearing if replacing the power supply solves the corrupt SD card issue. that would be great!
I am turning mine off with the powerdown command via CLI. Tested it 4 times and it comes back up with no issues for me. I have a B2 S2.