Based on your video, the unit does not seem defective. The Peak LED is only supposed to come on breifly for the loudest input signal.
I can't tell if you are getting a 'dry' clipped signal when the box is set for 100% wet, when the input is slammed (peak LED on constant).
I think this is what you are saying seems broke.
I will try to duplicate this, and let you know what I find, but for time being I would say the MXLNK is not broke.