Again, this must be related to the source device and/or the cabling. TOSLINK receivers on both decks going south the same way and the same time is not really probable.
And I keep my theory of the faulty source selector switch.
No, it is not correct. A broken RCA cable can show such a symptom. When either the middle wire or the shield is broken only, and only partially, say it still conducts electrically but the impedance is too high for the decks audio input circuits. Under a certain voltage treshold the signal will be considered as silence.
Indeed, it should not. Now you are getting closer.
I believe you have multiple issues here, so you need to begin solving the case step by step.
At very first, I would connect the two decks via two, known good RCA cables, and try to record back and forth between the two decks, from a known good MD disc containing known good audio material. If no skips, your lasers are OK.
Next step is - as Kevin already suggested above - repeate this test with two known good TOSLINK cables between the two decks (and making sure the audio material on the test disc was recorded an originally from an analogue source). If no skips, all TOSLINK cables and transmitters/receivers on both decks are OK.
Then we go from there.