Closed loop not working?

[rabbithat]

After jogging the motor around a bit, I let the stepper idle at what it thinks should be 351.5deg. The amount of error shown is 0.27 degree. See attached photo. Microstepping is set to 1/256.

Why did the stepper not automatically move to reduce the magnitude of the error? Even at 1/8 microstepping, it should be possible. Calibration test showed that the error magnitude should be 0.03.