So, they're hearing a feedback squeal on your signal, but you don't hear it in the room, right?
Sounds as if maybe the circuit that puts a tone onto the Spot carrier is not shutting off. The DM507 is a low-impedance mike. The banana mike is high impedance. The low-impedance mike may be "shunting" the tone audio to ground. A high-impedance mike would not do that.
Now, this may sound odd, but lay the opening in the front of the banana mike against your ear and see if you hear a faint tone coming out of the mike. It should be the same pitch as the one in your Spot carrier.
Or you could flip it over, remove the bottom cover and see if the tiny glass neon lamp just to the rear of the mike socket is dark when you key the mike, and lights up (dimly) with the Spot button.
If that lamp glows when you key the mike, this is probably the source of the tone. Clipping one leg of the neon lamp would cure this.
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