It's using ppm. He probably just didn't setup failsafe yet. You do want it in "no pulse". You had mentioned earlier that it was also giving you a throttle failsafe error, all you should need to do is lower the value on the failsafe page in mission planner by about 20-30 below your throttles low point.I see he has his bind in "Hold" why would he not use "No pulse" when using "PWM"?