I think your junction block, where the brake failure switch is located, is stuck or rust bound. There is a spring loaded shuttle valve inside that holds a plunger up until there is a unbalanced pressure condition happens. When the shuttle shifts the plunger dips into a groove (on either side) then a circuit is made to ground. Light on.

You may have to open the top of the switch block where the wire goes. That manually resets it. The plunger pops up when shuttle shifts center. You can remove it to inspect it with a mirror. It may even have to be replaced if it could interfere with flow out to the calipers. Probably rare. Not knowing the condition of the system in the past, anything is possible.

I'm trying to imagine why you are still having a "soft" pedal. Is it slowly leaking down? Not holding?

Is it not stopping strong enough in relation to your pedal pressure. In this case there may be a problem with the equalizer back at the rear axle. It keeps more pressure to the forward calipers.

Changing pads can be done anytime. It just displaces fluid back up into the MC reservoir.

Sorry to leave you hanging. Been away from this end of the board. You may want to start a newer post with an update.

Phil