On my ArduPilot Mega, that I use with a Futaba 10C and a R600HS RX, i have the throttle failsafe enabled and configured the PWM value for it. I checked with a USB connection that it does go into FS when I switch off the TX. There are 3 modes I have setup and checked the FS status on each : 

1 - Manual mode - FS takes to stabilize.

2 - FBW- A mode - FS takes to RTL

3. - RTL - FS does no action ( keeps in RTL ) .

Now on the field, when in manual mode, and i switch off the TX, it does appear to go into stabilize mode, ( as checked by USB ) , though when roll/pitch the plane it doesnt move the servos to auto correct ( as it does when i do stabilize mode with the TX on ) . 

Why is it that the USB says Stabilize mode is ON but still the servos are not controlled automatically like they do when i switch the Stabilize mode from the TX ?