Wait a minute, you pressed the hands free button at the >>>CALLED<<< parties' extension and it didn't stop the beep?
If so, that ain't right and I'd say to try that again because that's the correct procedure to stop that beep. The HF light will stay on the first time you press it but the beeping should stop then.
If you press it again, it will mute the speakerphone and the light will flash and when you press it again it should light up solid and enable the mic. I'd make sure all that works right too.
Phonehed in Dallas