After a lot of mucking around, finally got this thing working 99% of the time. Still get the odd timeout error.
Had to change the Options.xml file. I am not using any other patches or non-standard downloads, and the options changed are ones that are user settable.
In order to report temperature regularly, I had to actually set Z-Wave controller to POLL this device as it does not seem to automatically send status updates. If not polled, the temperature reading only updates when a command is sent to the device.
I used the device_config option under zwave configuration to specifically set polling on the temperature sensor and I also used this to hide the specific entities I did not use.
To minimise the time out errors, that was setting a couple of options in the options.xml file (which is the openzwave options file, normally located in the CONFIG folder in HA).
I set NotifyTransactions to true and RetryTimeout to 40000 and it seemed to work. I haven’t bothered playing with the settings to see if it can be tweaked as all my Z-wave devices are working properly with those settings, including the ZXT-120.