Focus mode and actual lens do not matter. I've confirmed with one of my A lenses by taking it off of A and using the aperture ring to set, that the camera will not fire in green mode, at all. No confirmation beep, nothing. No pressing of buttons (green button, etc) has any affect on it either. Put the lens back on A, it works fine.
In all Other modes, except M, it defaults to Av (so does the K20d IIRC) with a non-A lens, and everything works as it should.
Must be another of those things (like turning off SR in wireless flash) where Pentax thinks they know more about what we want than we do. I love the K7 but I'm going to have to take a REAL hard look at the next gen before jumping in.
I'll add that Green Mode is a fully automatic mode. I too would not expect it to work with an M or M42 type lens.
I've never noticed it before because I forget the green mode even exists. Tried it on my first K10d nearly 4 years ago, thought, That's nice, and never looked back at it.