I had the same problem when I installed my XS3 receiver. It will work anyway with no problems so I would not worry about it. I actually contacted Traxxas about it and got a response. I will find the response and post it here for you.
Here it is copied from another thread:
Here is the response I got from Traxxas Support regarding the flashing low battery light.
My question is shown first, followed by the response.
At 11:59 AM 10/10/2004 -0400, you wrote:
I recently upgraded the radio system on my Revo with a JR XS3 using the RS300 RX. After installing the RX, the low battery light will not stop flashing. Everything is properly installed and I know the battery is fully charged, so that can't be the problem. I am running the truck anyway without any ill effects. I am not the only one that has encountered this issue.
Thanks,
Rob
Hello,
It is the radio system. You will need to plug the battery into channel 1 long with the steering servo by using a Y connector. This avoids the voltage limiter in the BATT slot.
Best regards,
Stephen Lindholm,
TRAXXAS Customer Service