Seems I've heard of certain issues sometimes occurring when running Legacy engines with MTH power supplies. Something about them generating a different type of current or something that can cause malfunctions in Lionel Legacy engines? Don't recall now. Just a thought - I think I remember some discussion on this at some point. But it may have nothing to do with this situation.
There have been some threads on related subjects after Lionel released a video about sine wave characteristics of different transformers and generally touting better performance with theirs, including compared with the Z-4000. But I don't recall anything specific about Legacy malfunctions. However, I use a Z-4000 (with a carpet layout) and I have wondered whether than accounts for some of the problems I have had, or Legacy engines not performing quite as advertised. I doubt it because the problems do not affect all engines (and I have no problem with operating cars) but others would know better.