RE: Fail Safe not functioning correctly?
The intermittent control function as range gets longer means that your system is going into hold. It will go into hold if the receiver gets a short bit of interference or gets a bad signal. The duration is short enough that the receiver isn't going into the failsafe condition. The receiver needs a bad signal/interference of about 1-1/2 seconds before going into failsafe.
You're not getting "glitching".
Because the 9Z transmitter uses contacts against the transmitter antenna to transfer the output signal to it, a dirty antenna can definitely cause shortened range.