I'm pretty sure it's screen off, at least for mine when I tested it.
Agree with you that Apple could have make it "less sensative". Maybe use it as a boss/privacy key 🙂
I did a continuous ping and in the middle of it, pressed the power button ... screen turns off. Then a couple of seconds later, pressed it again and screen turns on. There was no interuption to the ping test.
Last login: Thu Oct 24 21:07:32 on ttys000
Alan:~ user$ ping 192.168.0.1
PING 192.168.0.1 (192.168.0.1): 56 data bytes
64 bytes from 192.168.0.1: icmp_seq=0 ttl=64 time=3.167 ms
64 bytes from 192.168.0.1: icmp_seq=1 ttl=64 time=1.367 ms
64 bytes from 192.168.0.1: icmp_seq=2 ttl=64 time=3.289 ms
64 bytes from 192.168.0.1: icmp_seq=3 ttl=64 time=3.250 ms
64 bytes from 192.168.0.1: icmp_seq=4 ttl=64 time=0.801 ms
64 bytes from 192.168.0.1: icmp_seq=5 ttl=64 time=1.533 ms
64 bytes from 192.168.0.1: icmp_seq=6 ttl=64 time=3.226 ms
64 bytes from 192.168.0.1: icmp_seq=7 ttl=64 time=1.376 ms
64 bytes from 192.168.0.1: icmp_seq=8 ttl=64 time=3.204 ms
64 bytes from 192.168.0.1: icmp_seq=9 ttl=64 time=1.480 ms
64 bytes from 192.168.0.1: icmp_seq=10 ttl=64 time=1.166 ms
64 bytes from 192.168.0.1: icmp_seq=11 ttl=64 time=1.201 ms
64 bytes from 192.168.0.1: icmp_seq=12 ttl=64 time=1.196 ms
64 bytes from 192.168.0.1: icmp_seq=13 ttl=64 time=1.370 ms
^C
--- 192.168.0.1 ping statistics ---
14 packets transmitted, 14 packets received, 0.0% packet loss
round-trip min/avg/max/stddev = 0.801/1.973/3.289/0.950 ms