If the pressure controller on the panel has rate of climb and cabin altitude settings (like a Garrett), it likely uses the vacuum line to modulate the outflow valves (pull them open). That modulation is what provides the signal to allow the cabin to climb or descend. I don't know what controller is in place but the vacuum is for cabin differential control. The squat switch is for ground use or emergency and simple opens the outflow to a maximum. In a typical situation, the outflow closes with wheels up then the vacuum signal starts to open the valves to provide the differential required to either climb or hold the cabin as set by the controller.
If the vacuum is disconnected, I suspect you simply are running with a fully closed outflow valve and the cabin pressure is an open loop with whatever pressure is supplied from the firewall. Does that sound about right?
What I am missing is if there is no vacuum line then why install the controller? How does it control anything? Those controllers can't be cheap.