While aero-towing a Mode-C transponder equipped glider, and using
PowerFlarm and transponder in the tow plane, most of the time the
glider will show up on the PF as a threat aircraft. Since the PF
prioritizes threats, this precludes another more distant "intruder"
aircraft as being displayed as a threat.

Do you mean PF can only follow one Mode-C threat? This would be a
significant step down from what my PCAS can do. If this is true the PF
PCAS implementation is very poor. Could anyone who flew with PF
comment on this? How many transponder threats can PF follow?

Based on your statement, the same problem will occur in a gaggle of
gliders with transponders. You will have no choice but to disable the
PCAS or filter out codes 1202, but if you do that any glider without a
Flarm but with a transponder is not going to be visible to you. The
only way this problem can be solved is with Mod-S transponders. You
will then associate Mod-S code with a Flarm ID and filter out
transponder signals coming from a glider equipped with both.