You appear to have posted this again 7/8/15 as "New User" unless someone from Whitehall, MI had the exact same question about a week ago. Here's my answer again:
That's normal, at least for my '99. The AC system is not controlled directly by the TEMPERATURE controller. It is controlled by the position of the vent output dial.
AC On:
AC (Obviously)
AC Max (See above)
Floor/Dash
Defrost
AC OFF:
OFF (See above above)
Floor only
Dash only
Although counter intuitive, this is a very common practice across many manufacturers - at least for the defrost. It makes sense, if you think about it. Say it's 55F and raining. You get in your truck & your shirt & hair are wet, shoes dripping onto the carpet. What happens? Your windshield fogs up (condenses the water vapor). How do you get rid of that quickly? (You're already 5 minutes late "because of traffic" of course...) You dehumidify it. That's the AC part. But remember - it's 55F and you're wet. How much COLD AC do you really want at that moment? None. That's why you can control the temp. You're blowing AC air and mixing in some warm air via the blend door.
My manual says the AC works down to about 50F, but I had a car one time that would do it all winter (upstate NY at that time).