I have an unknown but the same problem with two Debugging Stations. I have two DTL-H1200 which I got from the different sources. One of them is "NOT FOR SALE" unit with green sticker at the bottom. I tested them with the same black PlayStation CDs and CD-Rs and they showed me the same. They both read NTSC/J originals fast and without any problems. When I try original black PAL CD, I have only "CD Player/Memory Card" screen. I tried different PAL CDs and everything was the same. The same was also for NTSC/U/C CD. After that I had tried a lot of CD-Rs from different regions and I could run only two of them and they both have Japanese versions of the games. I can't say my CD-Rs are bad because I can easy play all of them on my DTL-H1100 without any problems. So... Original NTSC/J - both read any Original PAL - both don't read any Original NTSC/U/C - both don't read any PAL (CD-R) - both don't read any NTSC/J (CD-R) - "NOT FOR SALE" version plays two CD-Rs, normal version plays only one NTSC/U/C (CD-R) - "NOT FOR SALE" doesn't play any, normal showed me "Please insert PlayStation format disc" (!!!). Another strange thing... I have the same game on the same CD-Rs but Japanese and US versions. Japanese version works on both consoles, but US version does not. Any ideas?
If I understand correctly, what you're asking is why your JP Debugging stations won't read discs from non-JP territories (ie. PAL and NTSC-U). I remember asking a similar question before, and apparently the answer is: (some) Debugging stations (models) can read CD-Rs, but are NOT multi-region, and this is by design (it's not a bug, or issue with some particular units). I'll still leave it to the more knowledgeable/experienced people to confirm.
I've tried another Japanese CD-R. It works great on DTL-H1100 Debugging Station but it doesn't work on DTL-H1200. It's 100% Japanese (SCEI) CD-R. I think that DTL-H1200 checks the string "Licensed by Sony Computer Entertainment Inc" and disc name (SLPM, for example). My review CD-Rs have both and work on DTL-H1200. If so, I can't understand why Sony did it...
Newer Japanese BIOS will check PS1 logo geometry data and text string. if it mismatches it will check again. Over and over. So you get stuck on a black screen. Old Japanese BIOS will check PS1 logo too, but instead of locking up in a loop it will just skip the PS1 logo completely and jump straight to the game .EXE (no PS1 logo is displayed unless the disc has a Japan license in it's boot sector).
Some debug consoles can't output video in the wrong mode either, the screen just goes blank. This contributes to why it's harder to find debugs for your region in your own country, because they got stolen. Nobody wants the ones from other regions as you have to import games.
