The way this worked before is that if you turned off local control then the sliders and knobs wouldn't do anything (LEDs wouldn't change, etc) because they were turned off just like the keybed.  If those knobs or sliders sent Sysex then that data wouldn't be echoed back to the instrument when, as is often the default, Sysex is ignored at the DAW.  That's not what I'm saying here in this case.  Maybe there's a new wrinkle.  But often when some things worked and some didn't with respect to local control the answer was in the DAW's filtering of events (Sysex or particular CCs etc) that caused this.  What you describe is slightly different in that it seems when you move a slider or knob it impacts everything -- so this sounds new.

Hopefully someone else with an M or support provide more direct feedback/help.