Having similar problem in 16.04 as well, though the reason might be different.
With everything enabled this is the output of rfkill:
2: phy0: Wireless LAN
Soft blocked: no
Hard blocked: no
5: Toshiba Bluetooth: Bluetooth
Soft blocked: no
Hard blocked: no
7: hci0: Bluetooth
Soft blocked: no
Hard blocked: no
When either the switch in System Settings or the Indicator menu is turned Off Toshiba Bluetooth is soft blocked, hci0 disappears, and the Indicator icon disappears. When the System Settings switch is On, Toshiba Bluetooth unblocked, hci0 appears soft blocked, and the Indicator icon appears with it's menu switch Off. When the Indicator menu switch is On hci0 is unblocked.
It appears that each switch is grabbing the earliest bluetooth radio to effect rather than just one.
Having similar problem in 16.04 as well, though the reason might be different.
With everything enabled this is the output of rfkill:
2: phy0: Wireless LAN
Soft blocked: no
Hard blocked: no
5: Toshiba Bluetooth: Bluetooth
Soft blocked: no
Hard blocked: no
7: hci0: Bluetooth
Soft blocked: no
Hard blocked: no
When either the switch in System Settings or the Indicator menu is turned Off Toshiba Bluetooth is soft blocked, hci0 disappears, and the Indicator icon disappears. When the System Settings switch is On, Toshiba Bluetooth unblocked, hci0 appears soft blocked, and the Indicator icon appears with it's menu switch Off. When the Indicator menu switch is On hci0 is unblocked.
It appears that each switch is grabbing the earliest bluetooth radio to effect rather than just one.