Your auto mode switching happens fast. Guessing not the same issue I've experienced. Just similar result.
Unsure if just a glitch with the Neo I use. When flying manual mode after a set combination of distance and altitude Neo auto switches to N mode. Red warning box OSD notes too far and or too high. At a local field(flat terrain) I am flying below the tree line and can fly ~200 meters from launch pad without issues. When I've flown at our alpine ski area at a similar altitude but hugging the rising profile at about the same range but due to altitude relative to launch pad the Neo auto changes to N mode. I need to fly back downhill to reset to Manual mode. Bit of an experiment flying at home. More or less straight up in Manual mode. Don't remember hitting the 120meter limit before the Neo auto mode switched to N mode. Not an issue with the Avata2 using the same Goggle3 and FPV RC3.
Not RC or Video signal strength related. Full bars. Personally not a big deal. Neo for me is just a LOS, low flying, dodge the obstructions quad.