Loiter and Mission severe instability in Yaw

PX4 Autopilot VTOL 🚁
1

VTOL tiltrotor aircraft running 1.8.0 is well tuned in Stabilized and Position control.
However, when executing yaw over 90 degrees in Loiter or Mission mode, the aircraft exhibits extreme instability during the yaw. Pitching and banking over 45 degrees at times.
When switching to Position control Yaw is smooth and flat. What am I missing?

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Adding a picture

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It seems that the aircraft has a pitch down setpoint however the Pitch rate is asking for a pitch up.
The control output seems to be following the pitchrate but that makes the aircraft unstable.
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