I can use the View > Update previews feature to successfully update the thumbnails in the address book when the lid is closed and the viewer is "unresponsive". So it looks like interactions on the viewer are taking place (mouse and keyboard actions), but the viewer is not updating the image.
Good news... I enabled legacy mode and restarted the notebook with the lid opened. I connected with the viewer and confirmed that with lid open operation is normal. Then I closed the lid, and the viewer continued to function normally!
My last test was to restart the computer with the lid closed and confirm that the viewer was still functional, which it was.
It seems legacy mode was the answer for my issue. Thanks very much for the excellent tech support!