I found the issue, it is in the script /etc/acpi/powerbtn.sh. The script looks to see if there is some kind of daemon running that will handle the power button event. If not, it just calls "shutdown -h now" directly. I fixed this by adding one line to the /etc/acpi/powerbtn.sh script (PMS="$PMS mate-settings-daemon"):
[ -r /usr/share/acpi-support/power-funcs ] && getXconsole
PMS="gnome-settings-daemon kpowersave xfce4-power-manager"
PMS="$PMS guidance-power-manager.py dalston-power-applet"