Hi @TrishaMeyer1,
I see the same thing as you did when I test this.
I have a feeling Instructure never considered that people may use numbers for the grade scheme values (when setting up the grade scheme it does say "letter grade" but lets you enter numbers. I think the gradebook confusion comes from this, as even when selecting to enter grades as the grading scheme, point entries are still accepted (probably so there can be finer control of the exact points).
Maybe the gradebook should actually change to be more strict and only allow grade scheme values to be used, which would then resolve confusion between a numeric points entry and a numeric grade scheme entry? I feel changing that may get some negative pushback from faculty who like to mix letter and point entry though. In my head right now, I feel like perhaps purely numeric grading schemes shouldn't be allowed. It would break your current use case, but I really wonder how much confusion having points and then a numeric grade scheme is causing students. Perhaps things are more clear for the students than I think, but having 1 point mean 0 score, and 5 points mean 1 score would definitely confuse me sometimes if I forgot what was going on.
I was hoping than entering "1.0" instead of "1" would cause Canvas to realize you were entering points and not match to the grade scale, but alas that didn't work. It must be doing some numeric conversion before trying to match against the grade scheme or points... Perhaps that's something that could be adjusted and could be more agreeable to all... Before doing any manipulation of input, look at the grade scheme to see if there's an exact matching entry (1.0 would not match the "1" scheme)... If not, then convert the input to a number and treat it as points/percentage.
I agree the current ambiguity is not good though, and this probably need to go to Canvas support at least for review.
-Chris