Not sure if this is a bug or working as intended but I found the solution.
When this issue occurs the designate symbol flashes instead staying solid and bumps down the BFL when you press PAL. To fix it just cycle your HUD to any other mode then back to A/G and it will be solid now and PAL will work.
To trigger this you just have to set HUD to A/G before setting computer target
Edit: This also happens when you are too far from the target to lock on to the location the TV is looking at.