I changed the pass sensor to a KT model and the bike now behaves much better. Now I get immediate pedal assist. The sensor is available in Amazon for 13 dollars. Check it out here:
Amazon
The sensor is installed on the left side and I set C1=5, the highest assist sensitivity. But the assist behavior is different than the stock controller. There are three different pas control schemes as explained in the article below from Grin technologies. I believe the stock controller uses cadence pas and the upgrade controller uses constant power pas, but I am not sure. I am still researching this.
Basic PAS, constant power
This was the pedal assist approach used in the original "autoPAS" mode of the V3 CA device. Whenever the rider pedaled, a given amount of power was supplied to the motor. This power remained constant up to the speed limit of the system. With autoPAS set to 200watts, you would have receive the same 200 watts of boost even as you sped up or slowed down due to changing terrain or pedal power. When you adjusted the pedal assist level from the handlebar control, you would be directly increasing or decreasing this power setpoint.
Basic PAS, constant throttle
This is a common approach by many turn-key ebikes since it doesn't require any internal control loop. The PAS assist setting is basically like the throttle setpoint, so when you pedal the bike at the 50% assist level it would be like riding with 50% throttle. This generally has the effect of changing the speed limit of the bike, with 50% assist the motor will only spin up to half the speed. At lower speeds than this the motor will be able to output full power, while at higher speed there wouldn't be any assist at all. This mode can be preferable to constant power PAS for people who want their assist level to effectively regulate the cruising speed of the bike, rather than the power drawn from the battery. It is available as an option in the V3.1 CA firmware.
Cadence PAS
In a cadence controlled PAS mode, the power delivered to the motor also varies with the speed of the pedal cranks. In a normal bike with multiple gears, it is common to downshift and spin the cranks faster whenever the rider wants to put more human power into the bike, and the PAS system will respond in kind and apply more motor power as well. Setup properly, it is possible to have the ebike feel like it is responding to your pedaling effort just like it would with a torque sensor, based only on the pedal cadence.
In the case of a bike with a single speed gear, you might want the very opposite behavior, where the power is highest at low pedal RPMs when you are just starting off from a standstill or slowing down as a result of encountering a hill, and then decrease when you are pedaling fast and up to speed.