repair/replace/return options

You will get lots of advice here, none of which is going to give you a refund or new engine. That will have to come from one of your two options that you named. You have pretty much answered your own question. At least Mr. Muffin gave you one option. The other is to be a squeaky wheel with MTH .

"Bought a 44 tonner in mid-December.  Did not work out of the box, screeching noise instead of engine sounds, no horn, ignores direction changes but works fine conventional"

Monday morning quarterback answer: you should have returned it for an exchange in mid-December.  Too late now.  Unless you want an ongoing "discussion" with MTH, I personally would deal with Mr. Muffin.

Well finally got to talk to a real person at MTH after almost an hour on hold and they agreed to pay for shipping the loco back to them and it left yesterday.

Hoping I get a working loco back in the future.

You know, this and other similar episodes have turned this railroader into someone who no longer experiences the joy of buying something new and putting it on the track and having it work like it is supposed to.  That is more the exception than the rule.

If the joy is gone then people will understand that unless it is a VERY special loco I will not be buying anything new as far as motive power until after Satan gets those snow shoes he ordered on Amazon.

There will always be defects.  The key is to open it and test it the day you get it.  Any issues and I return it for an exchange or refund if no units available.  I don’t do the repair route, both Lionel and MTH take too long and then sometimes it comes back still with issues.  Then you have no recourse for a refund.