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@Gordon
The circuit itself looks fine...
However, I'd try putting a 200 Ohm (roughly) resistor in series with each LED you intend to keep connected. While just putting an LED on is ok as a quick hack for indication, the LED itself will stop the signal completely going down to 0, which may stop the signal from being received.
But if one LED attached to the slave TX (B6) is flashing, but the one attached to master RX (B7) isn't - that just sounds to me like a bad connection? Have you checked with a meter to see if they are physically connected?
(Having said that, because the LEDs without resistsors can stop the voltage going to 0, if you have differen colour LEDs then it might be a red herring - one will light while the other stays off)