This is more complex than that.
The keys animation are interpolated.
There is some keyframe, and once you move the stick there is an interpolation between the motion key.
So you have your motion key 1 and 2 but you have more animation between these by insterpolation.
If you are at the maximun walking speed, the more you lowering the stick, the more slowly the character walk. You have smooth change between animation character
But in the 1.07, at the maximun walking speed, if you lowering the stick, the character will stop
I can make a video of these if you want.
Hard to explain in english
I already tried with my xbox 360 pad for pc on 1.06 version. When you lowering the stick the character walk more slowly but it has only 2 set of slow speed: slowest and normal walk. It is your eyes perception that make to you seems more.
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