It shouldn't be looking for products if you have the discount screen open.
You're right. When in the discount screen nothing would happen. It would just beep, but not apply a discount. I did figure out why, though. I've been trying to use the code as a line item discount. Unfortunately I don't think there is a way to do that. When in the whole cart discount screen, there are options for dollar, percentage, and code discounts. You must have code selected in order for it to work. In the line item discount screen there is no option for code, so scanning a barcode won't work.
I'm glad I got something to work, but we really need to be able to apply line item discounts with the types of promotions we run. Hopefully in the future they will develop a way to quickly do that without having to type them all in.
I created a product referred to as my "discount", created a barcode for the product, then printed the label and stuck it to the counter. Then created a discount with the "code" as the "barcode" for the product. Then simply deleted that product so if it is scanned by accident or in error on the wrong screen nothing will be added to the cart to cause confusion.