I will try to explain what is going on as best I can.
When the AC adaptoor is plugged into the wall electricity is "stalled," basically it is waiting for a connection, the gamepad. But if the gamepad is set down on the cradle, or plugged in, while the adaptor is plugged into the outlet, the gamepad will experience an electrical spike when placed on the cradle, because of the "resting" electricity that will instantly flow through to the gamepad. If you plug in the AC adaptor after the gamepad is placed on the cradle, the electricity will gradually increase at a steady rate, this is less harmful, because the gamepad is allowed time to "adjust" to the electricity.
Keeping the gamepad on the charging cradle at all times, while its plugged into the wall, may damage it slightly, however that aspect I am not so knowledgable about.
I believe the orange light comes on because it is "charging" but when it "realizes" the battery is full, the light turns off, ending the charge. However electricity may still be leaking into the gamepad's battery, this may cause damage, as I said above, still I amnot 100% certain this fact is true.