Drift away Ivan! You had me worried for a second there...
"Most Secret War" by RV Jones, p 275
"Bombers were frequently being caught in German searchlights, and the idea had grown up that the searchlight control could be upset if a bomber switched on its IFF radar recognition set, and so the bomber could then escape. The proffered explanation was that the searchlights were directed by radar which was somehow jammed by British IFF"
So I remembered a bit wrong, the IFF was only (pointlessly) switched on when a searchlight found the bomber or was nearby. Jones worried that the Germans would find a way to interrogate the IFF set to the bomber's detriment.
The Monica system problem sounds a bit similar, although Monica was an initially useful countermeasure which became a disadvantage, rather than being a placebo countermeasure from the beginning.