Transponder and TCAS in the circuit is not a problem (any longer, was with the early TCAS versions)
We have lots of light GA and MIL trainers at our base, as well as 2 helo Sqns......everyone squawks mode C
at all times, and we have never had a TCAS RA on traffic in the circuit!
I have still to hear one single vaild argument to squawk STBY at any time....