[mmcpeck]

Found the answer, talked to a Toyota tech, and for whatever reason, that IS how Toyota designed the remote start to work.

Apparently Toyota was late in the game for having factory remote start, so this is one of the first systems they offered ('06), not sure if the newer factory remote starts still do it.

Even the tech I talked to said it made no sense and was stupid, to which I agreed.

It makes no sense to me that it would shut the engine down. The car can't go anywhere until the key is in the ignition and obviously if you have the remote to unlock it then you can get in a just re-start it, so I don't even see how shutting the engine down would make it anymore secure.

The only thing this stupid system does is put double wear on my starter motor...Great.