It has always been the case in DW--even in SC actually--that a torpedo can be decoyed if the sub maneuvers so that a decoy is between the torp and the sub, breaking the lock on the sub and causing the torp to chase the decoy instead. If this wasn't possible, once the torp had acquired the target you might was well stop playing. This applies with or without the LW/Ami mod.
In stock 1.03, and to a lesser degree in stock 1.01, I've seen torps turn away from the target to chase a decoy; I'm generally not happy about this. If it is happening, it should only be happening when the lock on the target sub is very tenous with respect to the torp's sensor in that acoustic environment, at that range, and at that aspect angle. Strangely, I don't see this happening much in modded play, where torp sensors are generally less-capable. I add this 2nd paragraph only because I don't have your replay, so I can't tell which of the two situations it is.
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