Hi,
course washout function on AP/FD is used to follow LOC in x-wind.
e.g. over a period of time (100s ?) the AP/FD takes the new heading as datum and if the course error is zero, it's washed out. You can proof it if you follow the LOC on a beautifull day and turn the ILS course in the CDI for some degree! The deviation remains (zero I hope
) but nevertheless your AP/FD will interpret it as a wind change, starts turning but will come back.
DON'T DO IT FOR AUTOLAND.
That's a different story.
regards