You can press the tone generator and then hit record and it records the
tone. But you are right, you can't activate the tone when you are
already in record. (At least on my 702 v1.74 it works this way).

For me it works the way I would like. But I record SFX, not dialogue,
so I don't have to mark the start and stop of each take. Do you
production guys still do that even though a take is now a file rather
than some arbitrary section of a 1/4" reel or DAT?

-Richard