The Conflict Palette will close if:
- The action is taken
- The macros are changed
- A key is pressed (keys that are handled by the conflict palette would not count)
- The macro group activation is adjusted (eg by an application or window change)
- Another conflict palette is displayed (not the same one filtered with a smaller list)
It used to be that any macro triggered would close one, but that is no longer the case, in and of itself, though if the macro causes any of the other things to happen, that could be an issue.
It is unlikely a timed macro would trigger each time immediately after pressing the 'o' though.
You can run the Terminal command:
defaults write com.stairways.keyboardmaestro.engine Debug MacroGroupToggle
And Keyboard Maestro will record in the log some criptic information about why it is deactivating it which might help.