Are you running gyro drift enabled in the FSX realism settings?
Maybe there's an offset between the indicated course and the real one and the AP then goes for the real one (internal FSX value) while you see the deviation on the CDI, because it shows you the offset value. This is just guesswork of mine though.
Would be a typical sim problem of course as real planes would always see the offset only on both systems.

I didn't have the 727 much on VOR to VOR enroute nav, only in the approach or departure phase where I was trying to follow some STAR and SID (which sometimes are described for the "old nav" too). I usually went for manual headings there though because she struggled with the short distances to the VORs when trying to catch the radials. Together with the slow AP turn rate, this really was some "chasing the needle" thing and isn't recommended.
So I just took the CDI to confirm my manual headings, not as primary source of driving the AP.
But your mentioned 30nm to 60nm sound very reasonable of course, she should work fine there.

Have to try this in some later flight I think.