Hey chris,
May i know which demo site you test?
Because I did consult with our demo site administrator regarding this, it seems like we haven't update to 2.0.7 latest version yet for our demo site, so from your video I can see that it still show the tooltip for the warning message.
In 2.0.7 version, we already changed this behaviour do not show any tooltip any more from the registration form, this is what I test in my locally with 2.0.7 version, you can check my video here :
http://screencast.com/t/r6Uj0LWM
It seems work fine for me, perhaps you can update your Joomla backend and FTP access so we can directly look into your issue?