FAA Order 8130.34D — UAS Operating Limitation A-29
Appendix A · p. A-6
In the event of a transponder failure on the UA, the UA must conclude all flight operations and expeditiously return to its base of operations. If a chase aircraft is used and equipped with an operable transponder, the mission may continue with proper coordination with air traffic control (ATC).
This limitation is only required for programs where the UA has an operable transponder and a chase aircraft is required due to planned flight beyond the visual line of sight of the ground-based PIC or VO. If this limitation conflicts with, or is a duplicate of an FAA Form 7711-1 requirement, then omit this limitation. If the flight operation is solely within airspace in which a transponder is not required, then omit this limitation.
Verify it yourself: the eyeball above opens the exact page of Order 8130.34D with this limitation highlighted.