Tom,
I quickly debugged, and the magic appears to be happening in the interaction layer :-(.
If you set a break in CL_BUPA_IL_SEARCH_SERVICE, you can see that in method CONVERT_SELECTION_PARAM, the y/n is converted to X or space.
As the parameter was already available in the search criteria with a value, this now results in parameter I EQ ' '... Making it an explicit parameter for the query.
My bets would be on adding the 'is not', and keeping the parameter itself as it was.
Changing the handling of the interaction layer concerning AET fields doesn't sound like a good plan :-(.
Regards,
Pieter