Bad PSU shorting the UPS

[underdogFTW]

I removed all components from my Corsair VS550. It was fed by a capable UPS. Then I turned on the PSU by shorting wires. Then I switched off the power. Ideally the UPS should still supply an unloaded PSU, right? But that doesn't happen, the UPS just turns off. So every time there is a power outage even for just a second, the UPS just turns off. I suspect this could do a lot of harm to the system.
The UPS works fine under heavy load and not only that but also tested with another UPS which also just turns off. So I understand that the problem is not with my UPS but with my PSU!

I want to know how this happens. If you could point me to some threads r even just tell me what this phenomenon is called, I can google my way out of this.

If anybody has any insight on how this could be rectified, it would be highly appreciated!
None of the products are covered under warranty with the power supply being over 4 years old.

 

[popatim]

What power are you turning off?

 

[underdogFTW]

What power are you turning off?

Wall outlet switch.
After I turn it off, the UPS should be doing its thing by providing uninterrupted supply. Instead it just turns off.
This only happens when I connect a power supply to it. All other appliances work fine!

 

[popatim]

Perhaps the electrical load is too little for the UPS and it turns off because it thinks nothing is attached, Try the test again with a (turned on) lamp attached.