The LED should turn off if there are no notifications available at all - that is, if you pull down the tray and all you see are the toggle buttons and the text “No Notifications”. If there are any notifications there, the LED will blink slowly any time the screen is locked. Unfortunately, the option to disable the notification LED doesn’t seem to have an effect right now, but we plan to fix it in the next update for the 2e.
If the phone is unlocked, the LED should not blink. If the phone is plugged in to charge, the LED should be lit permanently.