OK I received a reply from QHY Support. This fixed the problem.

On the QHYCFW3, there is a USB switch you need to turn on to use as a stand alone filter wheel.
www.qhyccd.com/index.php?m=content&c=ind...show&catid=68&id=177

Before when I booted it up the LED color lights would flash and the last light lit was GREEN, indicating this is NOT the USB mode.

After I took a pin and pushed the button while the power was connected, it switched to the USB Mode. And now the last LED light flash is RED meaning it's in USB Mode.

Works great in KSTARS/EKOS now.

One note is it shows 8 POSITIONS on the filter wheel. Since the QHYCFW3 has 7 positions then it will error out and stop working if you select position 8. But it times out after awhile and all is good again!

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