On the 818, headphone mode mutes connected DSPs but keeps the analogue outputs active.
The limitation is that the analogue outputs can only be run at fixed volume in this mode, as it is assumed that the headphone amp volume control will be used instead. I don't like this assumption/limitation - e.g., if the headphone amp is on the equipment rack, it would actually be great to leave the headphone amp volume, e.g. halfway, and be able to vary the 818 volume using the remote control without having to get up and vary it manually in between tracks, etc.
Also, there is a use-case (as in the OPs) for preferring analogue amps/speakers for, say, some types of music, and DSP for others, etc...
HC: 861v4/ID40/LPS, DSP5000, DSP5000VC, DSP3100, SW1600, HD621, Oppo BDP-105, Sony VPL-HW55ES 2-Channel: TEAC VRDS-7/Trichord Clock 3/PSU, Avondale S100, Harbeth Compact 7ES-3 Previous Meridian: 5000C, 5200, 7200.2, 6000, 562V.2, 568.2mm, 800v4, 808.2i, 818v2/v3, 861v8, 551, 502
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