Erm…
The description sounds like the expected behavior for MIDI ECHO -> STOP, and LOCAL ON in the synth. However you said that you have LOCAL OFF, and that doesn’t really compute. Not to say that’s the only possible cause for such a behavior but I can’t see what else could cause it.
Might want to double check it. This is the expected behavior for realtime playing, for recorded playback none of it matters:
MIDI ECHO: STOP, LOCAL: OFF -> no sound
MIDI ECHO: STOP, LOCAL: ON -> sound but no fx
MIDI ECHO: ALLOW, LOCAL: OFF -> sound and fx (ie the desired setup)
MIDI ECHO: ALLOW, LOCAL: ON -> double sound (“echo”) and fx for one of them