I can't help much with the diagnosis, being a W140 newbie. But if you get heat on High, then the valve is opening and is probably OK.

Here is the functional description from Alldata:

Duovalve

The duovalve regulates the quantity of coolant flowing through the heater core.

When the heat requirement is low the pushbutton control module switches the duovalve solenoids to ground, the solenoids pull in and block the coolant flow to the right and left sides of the heater core separately.

At the maximum temperature setting the pushbutton control module interrupts the ground connection, current no longer flows through the solenoids, and the coolant flow through the heater core is at its maximum.

During normal regulation the pushbutton control module completes and interrupts the circuit to ground intermittently. The closing and opening times for the duovalves depend on the deviation between the temperature present on the interior sensor and that set on the pushbutton control module.

So I would look at the sensor or the temp wheel.

But here is the procedure:

Coolant
Drain.

2 electrical connectors
Disconnect.

5 hose straps
Release and pull off hoses.

2 rubber mounts for heating system delivery unit (arrows)
Press off and remove heating system delivery unit

Install
In the reverse sequence, top up coolant and bleed heating system by turning both temperature selectors to the red segments and running the engine at alternating speeds.

Function check

NOTE: After completing the work erase fault memory in control unit.

__________________
Chuck Taylor
Falls Church VA
'66 200, '66 230SL, '96 SL500. Sold: '81 380SL, '86 300E, '72 250C, '95 C220, 3 '84 280SL's '90 420SEL, '72 280SE, '73 280C, '78 280SE, '70 280SL, '77 450SL, '85 380SL, '87 560SL, '85 380SL, '72 350SL, '96 S500 Coupe