Printer halts at first Z-probe attempt (no replies)

I upgraded my CoreXY printer's mainboard to SKR2 Rev.B and having troubles configuring ABL feature. I have z-probe of my own design with optical sensor and electronic circuit identical to the circuits of X, Y and Z end-stops.
Print head needs to move at a certain X, Y positions and push against printer's side panel to mechanically activate the probe. Probe is deactivated (retracted) when print head returns to home position at X-max/Y-max. Z-homing happens at Z-max.
When probe is retracted (not used) M119 shows it as TRIGGERED. Here is the output in Home position:

Send: M119
Recv: Reporting endstop status
Recv: x_max: TRIGGERED
Recv: y_max: TRIGGERED
Recv: z_max: TRIGGERED
Recv: z_probe: TRIGGERED
Recv: ok

When it is released the state changes to Open. Here is the output with activated probe at position X100 Y100 Z80

Send: M119
Recv: Reporting endstop status
Recv: x_max: open
Recv: y_max: open
Recv: z_max: open
Recv: z_probe: open
Recv: ok

When bed moves up and touches activated probe, the state changes from open to TRIGGERED.

My issue is - after activating the probe and executing G29 print head moves to the initial measurement position as per PROBING_MARGIN, starts raising the bed and as soon as the bed touches the probe printer halts with the error shown below:

Send: G29
Recv: echo:G29
Recv: >>> G29  X100.00 Y100.00 Z88.00
Recv: Machine Type: CoreCartesian
Recv: Probe: FIX_MOUNTED_PROBE
Recv: Probe Offset X-34.40 Y10.60 Z4.50 (Left-Back & Above Nozzle)
Recv: Auto Bed Leveling: BILINEAR (disabled)
Recv: 
Recv:   current_position= X100.00 Y100.00 Z88.00 : Probe::set_deployed
Recv: deploy: 1
Recv: Probe::do_z_raise(10.00)
Recv: >>> do_blocking_move_to  X100.00 Y100.00 Z88.00
Recv: >  X100.00 Y100.00 Z88.00
Recv: <<< do_blocking_move_to  X100.00 Y100.00 Z88.00
Recv: >>> do_blocking_move_to  X100.00 Y100.00 Z88.00
Recv: >  X100.00 Y100.00 Z88.00
Recv: <<< do_blocking_move_to  X100.00 Y100.00 Z88.00
Recv: reset_bed_level
Recv: >>> Probe::probe_at_point  X100.00 Y100.00 Z88.00
Recv: ...(20.00, 20.00, raise, 0, probe_relative)
Recv:   current_position= X100.00 Y100.00 Z88.00 :
Recv: >>> do_blocking_move_to  X100.00 Y100.00 Z88.00
Recv: >  X54.40 Y9.40 Z88.00
[...]
Recv: <<< do_blocking_move_to  X54.40 Y9.40 Z88.00
Recv:   current_position= X54.40 Y9.40 Z88.00 : Probe::set_deployed
Recv: deploy: 1
Recv: >>> Probe::run_z_probe  X54.40 Y9.40 Z88.00
Recv: >>> Probe::probe_down_to_z  X54.40 Y9.40 Z88.00
Recv: >>> do_blocking_move_to  X54.40 Y9.40 Z88.00
Recv: >  X54.40 Y9.40 Z-24.50
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
[...]
Recv: echo:busy: processing
Recv: <<< do_blocking_move_to  X54.40 Y9.40 Z-24.50
Recv:   current_position= X54.40 Y9.40 Z4.04 : sync_plan_position
Recv: <<< Probe::probe_down_to_z  X54.40 Y9.40 Z4.04
Recv: FAST Probe fail! - Triggered early.
Recv: <<< Probe::run_z_probe  X54.40 Y9.40 Z4.04
Recv:   current_position= X54.40 Y9.40 Z4.04 : Probe::set_deployed
Recv: deploy: 0
Recv: >>> do_blocking_move_to  X54.40 Y9.40 Z4.04
Recv: >  X54.40 Y9.40 Z4.04
Recv: <<< do_blocking_move_to  X54.40 Y9.40 Z4.04
Recv: Error:Probing Failed
Changing monitoring state from "Operational" to "Error"
Send: M112

Here is additional information. The same probe worked fine with old motherboard running Repetier 1.04.
Marlin version 2.0.9.3.
Configuration settings relevant to probing are:

#define Z_MIN_PROBE_ENDSTOP_INVERTING false // Set to true to invert the logic of the probe.
#define FIX_MOUNTED_PROBE
#define AUTO_BED_LEVELING_BILINEAR
#define RESTORE_LEVELING_AFTER_G28
#define PROBING_MARGIN 20
#define NOZZLE_TO_PROBE_OFFSET { -34.4, 10.6, 3.7 }
#define MULTIPLE_PROBING 2
#define GRID_MAX_POINTS_X 7 
#define GRID_MAX_POINTS_Y GRID_MAX_POINTS_X
#define Z_CLEARANCE_DEPLOY_PROBE   10 // Z Clearance for Deploy/Stow
#define Z_CLEARANCE_BETWEEN_PROBES  5 // Z Clearance between probe points
#define Z_CLEARANCE_MULTI_PROBE     5 // Z Clearance between multiple probes
#define Z_PROBE_LOW_POINT          -20
#define Z_PROBE_OFFSET_RANGE_MIN -20
#define Z_PROBE_OFFSET_RANGE_MAX 20
#define XY_PROBE_FEEDRATE (133*60)
#define Z_PROBE_FEEDRATE_FAST (4*60)
#define Z_PROBE_FEEDRATE_SLOW (Z_PROBE_FEEDRATE_FAST / 2)
#define Z_SAFE_HOMING

I have tried inverting Z_MIN_PROBE_ENDSTOP_INVERTING but that did not help.

Has anyone experienced something similar? What am I missing here?

Thanks