@GCRailways
1) Base2 plugged into 3 wire extension cord, extension cord near track, extension then plugged into AC source. You have done this.
2) Base2 ground reference is connected to outside rail of track of all your loops - can be accomplished by connecting all the loops outer rail wires together, then combine in the Base2 ground reference, then to transformer ground (this is just one method, and is described for demonstration purposes to stress all loops outer rail must be connected in someway to Base2 reference ground) Assume you have verified this.
3) Place TMCC engine on track, power up Base2, wait a few seconds, then apply power to track, engine should just sit there waiting for TMCC commands. Engine just sitting there indicates high probability that TMCC signal is getting from Base2 thru extension cord, radiated from extension cord to engine, and returned from engine to Base2 via track outer rail. Note: the indication of weak TMCC signal that I most often see is engine sits there with headlight blinking instead of being on solid. Engines sitting still with headlight on solid verifies TMCC signal is working.
4) With Base2 powered on, if you press buttons or turn velocity wheel on the Cab2 remote, a light should blink on the Base2 indicating that Cab2 and Base2 are communicating. If no Base2 light doesn't blink when doing Cab2 manipulation, could be your antenna on the Base2 isn't connected properly, or, the Base2 and Cab2 are on different channels. I feel we are most likely at a problem area. Cab2 communicates to Base2 on its own radio link, completely separate from the radio link from Base2 to engine. In one of your pics you show the Base2, and it appears the antenna is connected, but I would verify that it is screwed in finger tight. If antenna seems okay, have the Base2 powered up, select any engine on the Cab2, and blow the horn or turn velocity wheel on Cab2 - a light on the Base2 should be blinking while blowing horn or while turning velocity wheel. If not, maybe very weak batteries in Cab2, or Cab2 and Base2 are not set on the same communication channel.
To reinforce what @gunrunnerjohn was telling you, to run in conventional mode, you must disconnect the Base2 from its AC source. Unlike your powermaster that has a manual conventional/TMMC control switch, the engine does not have a manual switch. If the engine sees a TMCC signal, the engine will be only run via TMCC commands. To run the engine in conventional mode, the TMCC signal must be eliminated, and this is accomplished by unplugging the Base2 from AC power.