4 Inch cut in Forearm: Pilot Error or Possible Failsafe BUG?

Hi,
I am running AC3.1.5 on a 450 size quad and have had quite a good experience until now. Here is what happened.

I took the quad to my other apartment for the first time which is on the 3rd floor. Tried to arm it on the balcony but it would not arm as the GPS pre-Arm check was failing. Since I was not planning to use any GPS related features and would be flying indoors, I disabled the GPS pre-arm check in MP.
Copter Armed took off hovered for a few seconds and then al hell broke loose. The quad came directly towards me. Moving the sticks had no effect on the quad and it was pretty close so I had no choice but to stick my hand out and stop it.One of the props hit my forehand and broke leaving me with a deep gash in my forearm.

[attachment=0]OUCH_opt.jpg[/attachment]

Since I still had the TX in my other hand i killed the throttle but no luck because by then it was already in RTL (Failsafe kicked in)and heading to some incorrect location that it thought was HOME.

Looking at the logs both the GPS & the Geofence Failsafes kicked in together. It was a false Geofence failsafe because of the incorrect GPS location it registered and a completely incorrect home location too. Actual Home was about 30mts Off.

Logs are attached below however a few points I noted:

  1. If I skipped the GPS Pre-Arm - Shouldn’t all functionality GPS (especially fail safes) be disabled?

  2. The GPS Failsafe kicked in first.My GPS failsafe is set to LAND. However the GeoFence Kicked in also and caused RTL failsafe to activate. Now if the GPS failsafe has kicked in and subsequently the GeoFence failsafe has kicked in then why did the GeoFence RTL take priority? The RTL would be useless without a GPS lock. In this case shouldnt the GPS Failsafe have overridden the GeoFence Failsafe? Also, I never noticed the LAND command that I have set for GPS failsafe. It directly went to RTL.

  3. When RTL Kicked in, the Quad came straight at me. I have the RTL height set at 80mts. Shouldnt the quad have gone up before moving towards what it believed was home. Could this be cause I armed from the third floor.

So coming to my question - Is this the expected behaviour or is there a bug in there that needs fixing?
What I wanted to do was fly indoors without any GPS functionality. What is the checklist I should have followed to ensure the indoor flight was safe without interference from the GPS?

Attached are both the telemetry & dataflash logs. Please note that I take off only towards the end of the logs. at about the 75-80% progress of the logs. There are a couple of ARMS’ DISARMS but please look at the last ARM which is when I actually take-off.

Any help - Guidance would be grateful.

For reference, this issue has been discussed over here
diydrones.com/forum/topics/6-inc … ake-or-bug