Hi. I think the assumption in Charger Only mode is not correct. See here:
5. Operation
The document is for a MP but should also accord to a quattro.
Charger Only mode does not break the connection to AC out 1 - beause there is no relay/breaker to break:
It goes into dumb passthrough.
And - disabled UPS function does also lower the requirements for power quality:
Although it prolongs the time needed for switch over if input fails. But it is often helpful in a situation where your system is connecting and disconnecting sporadically or in a loop which you stated. Would give it a shot, if you havent already.
Reasearched myself a bit and also found no reliable real world experience with sync AVR gensets + gird code + ESS. Whish you luck to find a solution and get it working.