Rsync over SSH reverts to OS volume when Delete Files is che

I am running RSYNC OVER REMOTE SSH backups from a ReadyNAS 316 to an NVX on the same network.

This works great until I check the box to Remove Deleted Files on Target.

Here's the log BEFORE asking the 316 to Remove Deleted Files on Target:
Backup Job Name: T3 to T1
Backup Job Type: Incremental
Protocol: rsync+ssh
Backup Source: [David]/
Backup Destination: [remote:rsync+ssh]/192.168.10.201://T3-Backup/
Backup Start Time: Sat Oct 18 2014 19:00:21
Backup Finish Time: Sat Oct 18 2014 19:00:23
Backup Status: Success

Here's the log AFTER asking to Remove Deleted Files on Target:
Backup Job Name: T3 to T1
Backup Job Type: Incremental
Protocol: rsync+ssh
Backup Source: [David]/
Backup Destination: [remote:rsync+ssh]/192.168.10.201://T3-Backup/
Backup Start Time: Sat Oct 18 2014 19:00:44
Backup Finish Time: Sat Oct 18 2014 19:00:45
Backup Status: Fail: error in data stream. Please check remote rsync server settings.
The ReadyNAS OS volume cannot be used as an rsync source or destination.
rsync: connection unexpectedly closed (0 bytes received so far) [sender]
rsync error: error in rsync protocol data stream (code 12) at io.c(605) [sender=3.0.9]

The simple act of checking the Delete Files box seems to point rsync to the OS directory.

Is this a bug or a feature? Is there a work-around? If I'm doing something wrong I'm happy to get schooled.

Thanks in advance for your help.