How's this for a similar scenario/problem? You're flying a SID with a stop altitude of 5000'. You're in CLB (Managed on Airbus, VNAV on Boeing I think) and ATC clear you to FL80. You preselect 8000' and if there is a constraint at 5000' you end up with 5000 MAGENTA and 8000 on the FCU (MCP). The aircraft will obey the constraints in "managed".
Now ATC tell you to continue present heading whilst climbing and bingo - the Airbus reverts to OP CLB (LVL Change on Boeing?) and ignores the 5000 constraint and carries on to 8000' - level bust.
I'm not sure I understand this. Why would the aircraft revert to LVL CHG just because you pressed HDG SEL? One is a lateral mode and the other vertical.
If you select HDG in an airbus, does it revert to OP CLB even if you haven't pulled the ALT KNOB?