The only other reason I can see for it not working as it should is if you manually tune to Tower.
Well, would you believe it? You are right. (Don't mean to imply, of course, that your being correct is a surprise to me, Dave!). I guess I was expecting the frequency change to happen straight after the 'contact tower' instruction: since it doesn't happen like that I got into the habit of changing it manually, which for some reason PF3 does not like - there's no further response from ATC if you do that.
This flight I just left things alone, and as you suggested, the frequency did change eventually, and the VCP contacted the tower.. Still don't see how the log I posted showed me to be in Mode 1 (are you sure?), but that doesn't really matter now that this is 'sorted'.
Just shows.. how many years now have I had PFE then PF3? And still there's stuff to learn (or re
learn, after you've forgotten what you probably once knew! Oh to be 21 again...).