In order for the remote volume to work, the signal has to come from MiSTercade to the remote, then back to the MiSTercade. If you have something plugged into the 3.5mm port then the audio won't return back to MiSTercade. As long as you have the switch set to "remote" instead of local, the remote is plugged in, the main volume knob is maxed out, then the remote volume knob should control cabinet audio. Which output are you using for audio?
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My firmware developer found a small bugthat would cause intermittent USB connection for the control portion of MiSTercade. This affects all versions of MiSTercade, though nearly all affected units were identified and fixed through hardware replacement.
Since its discovery I've been booting each unit 10x to make sure the connection is solid.
In any case, everyone can update your firmware by setting the DFU pin jumper and running this script on MiSTercade (keyboard or controller required to navigate). Once complete, remove the jumper, and reboot.
https://github.com/misteraddons/MiSTercade-Config/blob/main/Scripts/mistercade_firmware_updater.sh