"Squawk standby"

I had a wierd thing happen a week or so ago.

We were VFR, and called up POU tower (class D satellite of NY Approach),
10 southwest landing with blah, blah. The tower controller told us to
squawk standby. After confirming that instruction, we did so and a
little while later he told us to squawk vfr.

When we asked what that was all about, he said it was for radar
identification. A little while later, he did the same thing to another
incomming flight.

Any idea what might have been going on? The only thing I can think of
is some sort of equipment malfuction which let him see that there was a
secondary return, but not read the code or see idents. Is that possible?