My C208 KAP140 sometimes just completely ignores the ILS too. I'm starting to think it's a issue with my peripherals.
What's your setup? Do you use any external radio/autopilot hardware? I use a fairly niche thing called a Class Echo, interfacing with SPAD.next, to control various systems, radio, autopilot, etc. I haven't tested enough to figure out what's actually going on, but because I've just imported and adapted a generic aircraft profile for the C208 that mostly uses default sim bindings and not the LVARs in the manual, I'm suspicious there's an issue there. The next time I have time to sit down and troubleshoot I'll be making sure to see that my setup only uses LVARs specified in the manual, and see if that helps.
When I just fire up the sim without this hardware, I'm usually not able to recreate any issues. Swapping between TDS GTN 750 nav and VLOC from both the unit and the main panel buttons seems to work as expected.
FWIW, the LOC tracking isn't working too well regardless, often happily settling 2-4 degrees off the LOC, but I've not flown a lot of ILSes in this thing yet so I don't have a good data set.