If you turn VoIP on in iPhone, you can any Extension OR Direct Number and all of the extension's phones (hardware IP, Desktop, iPhone) will ring properly. But if you turn VoIP off on iPhone, and dial a "Direct Number", it will ONLY ring that extension's hardware IP phone.
I escalated this to Tier 3 Support and they claim that is the correct, default behavior, which makes NO sense. Why in the world would you intentionally choose to make it work differently when you turn off VoIP on the iPhone App???