I'm assuming that a ground controller's silence would not have been regarded, either by the controller or the pilot, as confirmation of position. As you say, the controller is not necessarily looking at the screen at all times. The controllers of 1979 would obviously been aware of that but so too would have been the pilots. The transponder light only indicated that the aircraft was on the radar screen, somewhere. It didn't indicate whereabouts on the screen. That information could only be provided to the pilot by the controller. If Capt Collins went below MSA because the transponder light came on (which it didn't), then that would have been an equally bad piece of flying.