Well I figured out my problem. It was due in part to "mode 1" but the real issue was that my 18650's were not fully charged. After fully charging them the performance issues are gone (though I still prefer the
vape from stacked 350's, however there is just an ever so slight difference and not the glaring one that was previously present) and that delay/drop out is gone.
I feel like a dope but hey, I'm new to the battery game so I guess it's a learning process. Thanks to all of you who have offered help and suggestions.