The problem was the Halt command happening randomly by itself.
I bought a ZW-C not knowing the defect and was using all 4 handles to power different accessories on my layout with 4 bricks.
There was no connection to the track and I just had it in conventional mode. One handle was powering a set of lights on my layout. Randomly and very frequently they would shut down. I pulled my hair out thinking it was a short, or overloading the circuit, or bad brick.
Then one day I decided to try and dig into it by switching the circuit to another handle. By accident I noticed when my hand got close to the transformer controller, it shut down.
So all along what was happening is anytime my body or hand got close it would shut down. I never noticed it!
I could now repeat the problem over and over and have it shut down when I touched the case of the transformer controller or waved my hand near it. So I dug into it and made a post on here and Marty answered with the issue.
All I did to resolve it, since Lionel told me no chips are available, is take off the cover and unplug the TMCC signal antenna from the board.
Problem solved! So I can still use it as a conventional transformer now, and it does not shut down anymore.
Its a shame as I could never sell it as a working TMCC controller, just a conventional one since I cannot get the updated chip.