The 1980 450SEL and SL have similiar circuitry and failsafe mode (which you've discovered one of them).
For the 450 SL, check fuse numbers 6 (16 amp) and a inline fuses. The inline fuses are in the fuse box. They look just like the type you see on car radios. one is 2 amps and the other is 8 amps.
Anytime any of those go, it's all or nothing heat. Not bad for a limp home mode, 'cause it could be worse.
PLEASE let us all know if that's the answer.
S, J.R. Brown
2000 G500 LWB Obsedian Black
2005 Toyota Tacoma Access Cab Off Road Sport
1993 Volvo 240 Sedan Anthracite
1980 450SEL Champange (owned it for 15 years. Great car)
1986 280GE LWB Anthracite (Sold it and kinda wish I hadn't)