The XL5 doesn't like water and dirt between the coolers, it may think it's moving when there's a bit of a connection or corrosion.
You would get LEDs like Greatscott said although everything is a-ok.
And binding seems to be ok, because the steering works, but maybe you just set the MuFu button to throttle trim or dual rate, and so the XL5 will not arm when throttle is not centered on startup or will just not get any signal because you dual rated it down to almost zero. You could check the throttle signal pretty easy:
- unplug the motor wires (DO NOT FORGET THIS!)
- switch servo and ESC wires at the Receiver, e.g. ESC in Ch1 and Servo in Ch2.
- power the system up
- now throttle lever should get you full steering action
- if it doesn't you either have a bad Ch2 (plugged in the ESC wire reversed and boom goes the servo signal on this channel, btdt...) or a bad setting on the Transmitter.
- if it moves correctly you have a problem @ the ESC end, like ESC and/or motor are done, wiring is bad, or maybe even lipo cutoff or overtemp cutoff, and these can come up false positive by water or dirt.
Also, an 8T motor is waaaay too fast for the TRX4, and waaay to hungry for the XL5, so no, that's nothing to drive, would be just good enough to test the ESC with a loose hand held motor if you had it lying around.