I am on Vice 3.7.1 GTK3(with mac fixes), C64C PAL, 8565 VICII, 8580 SID, 1541 II, using keyboard joystick function, basically default settings, and cannot play it with drive emulation turned off. I can autostart it (it gives a $LOAD ERROR, but seems to run fine) and it starts, but it resets when it goes to load the first level. Not sure if I have something else set wrong, or if this version of Vice on mac is not working properly as far as TDE.
If i keep TDE emulation on then it loads and plays, but is slow for the disk loading portion and not sure if it screws up other stuff at some point since you say to keep TDE off.