OK, that indicates everything is working correctly.
Now, try to put in a "good" signal to the i2M to check the MIDI latency. Ideally, it should be a high-frequency (2 octaves above middle C, for example) and a sharp plucked sound. Something like playing a high note on a guitar's top string works well, using a pick.
The latency should be only slightly different from what you experience on a keyboard. 5-10ms additional latency at most.
The signal shouldn't clip on the i2M, but it should also be large enough to give it a good signal (you can monitor the signal level using the audio output of the i2M).