Cessna T207A Autopilot is Unstable on VOR

You switching from cockpit view to external view while in AP?

If so …

This is a confirmed Bug in Sim Update 12. Asobo said they fixed it in Sim Update 13, but unfortunately it looks like only fixed for G1000 planes. Many other planes still have this bug. Here is the original Sim Update 12 bug thread on this bug.

I think you will see that if you go back into cockpit mode, the autopilot catches up again.