You have to be at a high enough altitude to get a signal.
The game's LOS effects are a little extreme, IMO, but basically if you're flying too low you will lose the radio connection to the buoy.
Try flying at 50-200 feet for torpedo or weapon drops, and over 1500 feet for search work. If you need MAD / SAD 500-1000 feet is enough to still pick up a contact as well as give good radio range on your sonobuoys.
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