Yes, it does not controls the disks blue (or white) activity (or disk present) leds, neither the network leds. It is the linux disk and nework drivers that controls them.
Actually each disk led is dual, containing also either a purple or orange led, and those are the ones that sysctrl (fan/temp/leds/buttons) "controls".
On boxes with an USB plug, there is also a double blue (or white) and purple/orange led that sysctrl controls, on USB plugging or power or USB button presses.
On the DNS-323/321/325/320 (not owing a 320 myself) the power led (and button) is also controlled by sysctrl. On other 32xL boxes it is the hardware that "mostly" controls both the power button and led.
The expected behaviour for the orange/purple led are them to be off, except -when the disk is in standby, when a short on blink is followed by a 2/3 seconds off state, -and both leds permanently on when there is a detected error that you might consult in the webui status page (and turn on when you clear the systemerror log, acknowledging the error; however, a RAID degraded error turns on both purple leds, and they can't be turned off until the RAID error is solved)
The above should be added to the "about leds and buttons" wiki. (yes, I keep trying, even after all those years -- its my gauge, not only the download figures).
*but* I also observed that leds sometimes have an erratic behaviour, usually after a momentary power cut or glitch. Generally a reboot or even power down is the only way to restore proper leds state.
So yes, its expected but not frequent.