Regeneration normally always begins when one takes one's foot off the accelerator. It causes the car to slow down very gradually. This has been done in order to simulate engine braking in the hybrid. It does not require the brake pedal to be depressed at all. This is distinct from the greater regeneration that occurs when one does depress the brake pedal. There's no contradiction here. Nor do I see any indication that the cruise control is misbehaving.

Stan