SNS, Was a visual sighting made by the crew of either aircraft? I think probably not in that case, with tragic consequences. Which is one reason the instruction manuals of alerting systems other than TCAS 2 forbid avoiding action based on derived information alone, i.e. not until a visual sighting is made.
Another reason is that an out of tolerance transponder / encoder can give a false altitude to TCAS; I've seen this on a number of occasions where a GA aircraft has gone past at a different relative altitude to that shown on the TCAS display.
The original poster will obviously not be using TCAS 2; if he did choose another system he would presumably read the instructions and use the equipment properly, and with due regard to its limitations, just like any other piece of on-board equipment.