Leaky outdoor faucet when using spray nozzle
Actually, it sounds more like a siphon or vacuum breaker working fine. It's not leaking with pressure on. When you turn off the sillcock and release pressure on the hose, it moves the water in the hose away from the sillcock, creating a vacuum at the faucet, which causes the siphon breaker valve to open. Then the water rebounds a bit and some comes out. They have only failed when they leak under pressure, or do not open at all. The brass cap thing on top of this sillcock is the built-in vacuum-breaker. The type described in Steven's answer seems more likely given where you say water is coming out. In either case, I don't see any sign of failure from your description of the behavior.