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I bought a new Direto XR-T a few weeks ago to use with Zwift, and I'm generally very happy with it.

However, I've noticed when riding on courses that have undulating terrain (like Titans Grove) that the trainer's resistance doesn't seem to take the rider's current speed inertia into consideration when switching from a negative to a positive gradient.

On other trainers I've used (like the KICKR), the resistance felt in the pedals gradually increases after coming out of a negative gradient and starting to go up a positive one as you slow down. The Direto XR-T on the other hand immediately sets the positive gradient's resistance when you enter it resulting in what feels like hitting a resistance wall.

Example:
Let's say I'm going down a -5% gradient and pick up speed going 60 km/h. The course then comes out of the negative gradient and goes up a small 200 m 5% positive gradient.

What I expect to happen:
The resistance felt in the pedals when entering the positive gradient should be negligible due to my speed's inertia. The resistance should then gradually increase as my speed slows down, so that I have time to react to the resistance change and shift accordingly (like what happens when riding in real life).

What actually happens:
The resistance felt in the pedals when entering the positive gradient is immediate, which results in an unnaturally abrupt resistance change in the pedals. The change is so abrupt that it's very difficult to change gears properly.

I've only noticed this with the Direto-XR-T, and not other interactive trainers when riding on Zwift.
I'm starting to suspect it may be an issue that could be fixed with a firmware update?

What firmware are you on? My XR-T builds the resistance in what you describe as your ideal way, and nothing like the abrupt way that you describe as its current method of operation.

According to to Elite Upgrado app I'm on the latest firmware.

One thing I didn't mention in my first post is that I prefer to use a 100% trainer difficulty setting in Zwift. This is what I've used exclusively in the past with other trainer brands. However, with my new Direto XR-T I've had to set it to 70% to minimize the "resistance wall" effect to a level that is acceptable.

After experimenting with different Trainer Difficulty (TD) settings in Zwift, I've found that a setting around 50% to 60% reflects the behavior I'm after. It's almost as if the firmware was developed and tested in Zwift with a TD of 50%...

50% in zwift, which is default after Installation, is not meeting reality. 10% slope feels like 5% this way.
Means, in steep climbs you are never forced to use 1st gear with low revs, pushing youself up with brute force. You are still able to adjust your watts in a confortable way, even using higher gears and good revs. Its almost a cheat, even if zwift evaluates power for speed and acceleration so you are not faster. Yet you are faster because you are riding way more confortable.

If you are at 60kmh and + 5% slope, the power to keep speed konstant would be extremely high, so the wall experience is imo ok. In reality you just would slow down very fast too, being unable to keep it up