One thing to check, make sure the switches on the MTH engine are set to 2 rail (vs 3 rail) and the other switch is set to DCS (vs DCC). You imply that your layout is 2 rail direct current but you are using DCS to control the engine. If the switches are set wrong, the handheld / system won’t find the engine.
Ever so often due handling an engine, the switches get hit to a different selection.