Long lasting deterministic transitory shocks vs true permanent: what is happening?

My hunch is the problem is not having called steady for your terminal condition. That implies the initial steady state is the approximation point used. That should matter much in your context. Use

rplot tauini mu_b;

to see the very different trajectories in the two cases (including the strange terminal condition you are getting in the lasting case). Here, the system never settles to a terminal steady state.