Tom, The premier engine if the board is in the tender has a MUX set up. The typical issue was flickering with smoke on, not going out on motion. The mux set up generates the positive voltage for the engine lights and smoke, from the engine mux board. 2 diodes. They get DC power from the motor leads. Same way a PS-2 3V makes it even without MUX. In that case those diodes are on the PCB at back of engine that tether connects too. Still PV generated from Motor leads since one of them always has High DC voltage from the rectifier.
So can be several different things in the wiring. From motor to MUX, mux to lights. Some engines had pretty brittle wire and would not be the first time a bad solder joint on the purple wire or blue/orange for lights had a bad joint.
The markers are triggered off the mux by what the lights are doing. So yes it can be a data issue coming from the tender mux. Rare, other than poor joint on back of engine pcb for the HL input. The HL and IL input from the PS-2 board goes to tender mux, which sends a single signal via the HL wire on the tether to the engine mux. The engine mux decodes it to determine if you want HL on off, or Cab light on off. Since a simple circuit, the markers follow that on off.
The actual LMK control on the remote, only controls tender markers directly. Not engine markers.
The other thing is unstable 5V supply. If engine running fine with speed control and smoke works, probably not wiring. BUT if smoke fan motor noisy or going bad, it can cause issues with MUX function. But it also usually causes issue with speed control, and PS-2 board function.
Lastly, could be the MUX mod too. Depending on year and level of wiring in your engine. It may need the mod. G