Michael,

There are a few "glitches" in the AP yet.  Should be fixed in the next SP, I would hope.

I haven't experienced an issue with the Alt Hold turning off the Hdg Hold.  What I do have happen is when I switch from MAN to NAV/LOC, the Alt Hold also turns off, even though NAV/LOC has nothing to do with Alt.  I have to constantly remind myself that I will have to re-engage Alt Hold when I make the switch.

Another thing is when switching from NAV/LOC to AUTO GS, if I an not yet in range to intercept either the localizer or the glideslope, it still will turn off both Alt and Hdg holds.  I don't think it's supposed to turn off either until it's in position to begin interception.

I don't know if that's accurate or not, but if it's something that was overlooked in testing, it will hopefully be fixed in the first SP release.