Sounds like you got one with a faulty bulb, that long pause is when the yellow is suppose to be displayed. The signals work with the sensor switch embedded in track.
Kato did at one point discontinue these similar to what they did with their automatic crossing systems, only to reintroduce them just a year or two ago.
Do you have the signal with the while or black signal mast? If it is the black mast you have an older signal which might account for the bulb not functioning properly, if you have the white one definitely a manufacturer defect and I would try to get it exchanged for a different one.
I have both the older and newer ones and according to the back of the box.
1) Lead car (locomotive) passes over sensor, causing green light to change to red.
2) After 3 second delay (achieved only by rolling stock with metal wheels), red light changes to yellow.
3) Yellow light changes back to green after an additional 3 seconds.
*During reverse running the signal will remain red. The signal will remain green when idle.