FW 200 altitude hold won't disengage once set

I do not believe this is a bug. Note the bottom altimeter in km. That tiny orange marker is your alt hold. Even if you try to turn off your alt hold button, that marker is still holding.

Say you’re holding 5000m. You try to turn off your alt hold and roll UP your VS. That works because you’re above the 5000m alt hold. If you try to go down, you can’t.

Now roll down using the dial I have moused over to any alt below 5000m. You’ll then be able to disable alt hold and roll your VS down.