I checked the weather station and they reported .17 in of precipitation on the day that it still watered. I deleted that 'Flexible Daily' schedule and added a 'Fixed Day' schedule.
This morning it skipped watering and said in the email "your weather station has observed 0.28 in of precipitation in the past 24 hours" along with "Your current Rain Skip threshold is 0.125 in of precipitation". So either the threshold is higher for the 'Flexible' schedule than it is for the 'Fixed', or it did not work correctly. It should be the same for both or give me the ability to edit it regardless...I look like a fool watering my lawn when it is raining outside.
I'm glad it works on this setting at least, but there is room for improvement when it comes to rain settings. It would be nice if it used the local forecast from weather.com or something, instead of the weather stations. It still wouldn't be 100% accurate, but could modify the watering schedule based on the 7 day forecast.