If you've got signal for bypass, not for engaged, then likely you've got a signal short-to-ground.
Quickest way to source that, I think, is to audio-probe it and see where you lose the signal and then inspect the components closest/connected to that point.
Just for fun, have you tried reflowing everything?
I'd start with the OUT on the PCB, it looked blobulous and may be a cold solder-joint despite the amount of solder there.