Having to be in the "both" position to charge batteries doesn't sound right to me, I think the problem lies with the installation of the battery isolater. If you take a look at installation instructions, specifically paragraph 8b, you could have problems charging an accessory battery unless you have the Smart Switch Guest #2200 which I'm guessing no one has this item.
My charging problem was that I wasn't charging any of my three batteries from the alternators, now that I've bypassed the isolater I have remedied the problem for my starting batteries. I leave the charging of my house battery to shore power and the generator.
Due the above mentioned problem and a few others, I have inherent distrust of Four Winns electrical engineering, anytime I have an electrical problem I assume that Four Winns screwed it up and start researching how the item should have been wired.
http://www.marinco.com/files/support/pr ... LATORS.pdf