Padlock will only track a target that can otherwise be seen with the manual system... if the padlocked aircraft leaves your field of view (flies under your plane for instance) then you will have to reacquire and lock it again manually.
Is there a viable reason or benefit to use padlock?
In other combat flight sims padlock is somewhat useful or even necessary because the viewing systems in most other combat flight sims have a quality called "suck" which HTC wisely chose to engineer out of AHII, giving you instead a viewing system that approximates the ease of tracking available to the Mk. I eyeball and swivel-neck in real life.
Is there a viable reason or benefit to use padlock? If you lose sight of the locked target plane and lose the padlock, why is it part of the game? And to what purpose would you lock a friendly?