Appears to also be broken for me also on single player, not able to lock in any way.

Don't know if ya all have figured it out but the torpedo has to be pointed at the target, make sure the arrow is pointed toward the front of the torpedo.

Just gonna jump in here...we are seeing the same issue in our dedicated server. This mod works great in single player, but the hardpoint is broken on dedicated servers. It will not let go of the missile, and if you manually delete it, the torpedo will work properly...but the ship attached to it will also suddenly behave as if it is a torpedo. This is with the exact procedure that works in single player and with a torpedo and ship that were verified in single player.