The BCR or battery provides short-term (for seconds) power to the PS2-3V board when there is NO TRACK POWER. In DCS-command mode you always have track power even when changing direction. OTOH in conventional mode you momentarily remove track power to signal direction change; and of course when you press the Direction button track power is momentarily lost...and the BCR (or battery) kicks in.
The battery circuit draws on a charged BCR or charged battery when track power is lost. It converts the ~2.5V battery voltage to around 5V for use by the PS2 digital/audio electronics. Since your sounds IMMEDIATELY cut out when pressing Direction, this tells me the converter circuit is broken. One of the MTH Tech gurus can comment but I don't see this as a DIY repair job. I suppose to satisfy one's curiosity you could look at the corner of the board where the 2-pin battery plugs into the so-called power-supply board of the board pair. There are about a dozen components (top and bottom) around the connector that do the heavy lifting. If you see a charred or obviously damaged component or can sniff the tell-tale burnt electronics in that corner of the board then at least you'll know it's not something "simple".
While the parts cost to repair the voltage converter circuit would be maybe $1-2, it's the component-level expertise/labor, shipping, etc. which might be a show-stopper. At one point in time it seems you could replace the entire power supply board but even then I believe the board was something like $75 (?).
As an aside, you may ponder whether you could simply run this engine as-is but only in DCS command-mode. One not-so-obvious use of working BCR/battery power converter is for saving DCS parameters between operating sessions. So if you need to change the DCS engine address, the change would NOT be saved thru a power cycle. Same with changing volume settings, smoke settings, and so on.
