Old Boeing Driver. I have never seen a setup on an American built plane that auto switches. Doesn't mean there isn't one....
Most failures will trip a fault that will show up but some faults in the receive path won't trigger an error, the transponder just won't know it is being interrogated, and won't reply.
Jet I agree it stinks to high heaven, but that doesn't mean it was a willful act by someone on the flight deck...