I have the exact problem. iMini is reading the knobs as a switch instead of a knob. Really pretty lame, since that's what the knobs on the minilab are supposed to be used for. I think it's a hardware issue, since it does the same on all the synths on my iPad.
I'm guessing they know about it, but can't do anything now that they've put endless knobs on the minilab.
Maybe a firmware upgrade? Anyway.