What you describe sounds like the protection mode the pushbutton unit enters when the auxilliary electric water pump is shorted out. The electric pump pushes a steady flow of hot water through the heater core so that consistent heat is available whether the engine (and hence the engine driven water pump) is running at idle or highway speed. Unfortunately, I don't know where the electric pump is located on your 124 chassis w/M103 engine. Hopefully someone familiar with your can will chime in and identify it. There is an electrical connection which you can just unplug to disable the pump.

Do you live in a mild climate where after 10 minutes the a/c has fully cooled the car? If so, the pushbutton brain will start to mix in some heat (warming the cooled air) to keep the interior from dropping below the set temperature. Whenever the brain calls for heat, it activates the electric pump - and immediately goes into protection mode.

- JimY