I have the same problem. I am afraid I still have not solved it though. You say you can "press FX and ‘not’ select an insert/send and the rotary encoders would control the instrument by default".
Any time I select anything from this panel (Audio / VI / Bus / VCA / all) or the secondary functions (inputs / midi outputs / FX / user), the "all" light at the bottom starts flashing and I get no options. I've recorded a video here to show you:
Is there a problem with my Faderport or have I missed something?
I'm using a MacBook Pro: macOS Catalina 10.15.6
I'm using Logic Pro X
Any help would be appreciated,