OK, I finally had time to look at the problem with the autopilot. Please forgive me if I sometimes appear confused but Draken contains over 15000 lines of code, and some of it I hacked together ten years ago when my brain was in better shape…
First of all, the FSX Wing Leveler is not (supposed to be) used at all in Draken. The Altitude Hold mode has its own wing leveling, which can only be disabled via aircraft.cfg AFAIK. If you issue the key command for Altitude Hold, Draken will lock on the current pressure altitude but Wing Leveler will not be activated.
However, pressing one of the buttons on the current version of the autopilot panel will activate the Wing Leveler, although it is supposed to be the same command. I overlooked this since I usually use the key commands in flight.
The proper way to fix this is to modify the mode select functions in styraut_panel.xml and styraut_panel_vc.xml to switch off the Wing Leveler after activating alt/att hold:
And so on. WING_LEVELER_ON should never be used.
The bank angle hold function is indeed not working very well right now; as you pointed out it may put you in a “death spiral”. This is basically a matter of fine-tuning the function in styraut.xml and the three “max_bank” entries in aircraft.cfg. I am working on this right now.