Ok, I suspect it's probably a bad cable or something in your setup, but first things first, let's rule ou the timefactor.
First, do the simplest setup possible. Using cables you have verified are working, set the unit up for mono directly in front of your amp/mixer/whatever, guitar in the mono input, out of the mono output. Does this simple setup have Delay A? and Delay B?
If it does, plug a cable into out2 but not into anything. Does Out1 still have Delay A and Delay A only? Now unplug the input to the amp from Out1 and plug in Out 2 into the amp. Do you only hear Delay B?
If the answer is yes to all of these quesitons, the timefactor is fine and there is something wrong outside of it.