The local control has been turned off and the KS is not being used in a complete MIDI loop. Check the third page in the global menu. This must-read Local Control ON for the KS to respond to its own keyboard and controls unless there is a complete MIDI loop. See page 35 in the K-Station manual for full details on local control.
Alternatively, the SEQ setting can be selected from the global menu. This is a special mode that is useful when the KS is connected in a complete MIDI loop. It makes the keyboard local control off and all the KS controls local control on and stops the KS transmitting MIDI messages when front panel controls are adjusted.
Note that to record any control data into the sequencer local control off should be selected and a complete MIDI loop should be used.