I'm a former Apps engineer for Hardinge/Bridgeport. I had a customer down Jersey way. He had Mori's with custom M code similar to your issues. I contacted Fanuc and they stated the that the Manual Guide-I was the issue just as you suspect. They only admitted it after a couple of weeks of try this, try that....
After quite a bit work the only work around was to move all custom M-codes to the 4xx series, which worked without a problem. As for you thinking the Hardinge-MTB locked out these is incorrect. To be honest MG-i caused a lot of problems, very little support from Fanuc and Hardinge/Bridgeport didn't want it on the control, but came on the control.
If I can be of future help, feel free to contact me. I still have all my documentation and paperwork on the XP3/XR machines. Pretty nice equipment, got to got to Taiwan and see them built.