that is weeeeeeeird.
the hexfile should work for everybody (and has been doing elsewhere).
So - yes, the new default is “LED On”, “LED flashes on MIDI data”. You can alter that in the third tab of the editor’s edit view. It’s a good way of knowing the new fimrware is on there.
The only debug thought I had was: the old editor just looks for a MIDI device and receives MIDI data from it, which is why the old editor Just Worked. The new editor does a little Sysex handshake to confirm it’s talking to a 16n, rather than any old midi device. And it looks like because that handshake wasn’t working, nothing else would work regardless. Highly strange.
I think for now I’d like to just note you had an issue, and managed to solve it, and return to it if it emerges again… because it sounds like you have something working?
Do check that the editor will let you customise faders/options - that indicates the sysex transfer is working.