OK so first you should check what edition exactly are you using; I believe MK4 comes with VirtualDJ® DJC edition (i don’t know the details on that particular edition). So maybe it’s some kind of limitation? Or are you using another edition?
In VDJ, go to Settings – Mappers, pick Hercules DJ Console Mk4 and check the mapping. look for CROSSFADER_CURVE; also, just to make sure, check also the mapping of the keyboard; maybe you have some key or button or whatever changing the crossfader curve mode without you knowing about.
If you feel comfortable with it, open the Windows Registry (WIN key + R, type regedit, click OK). Now go to HKEY_CURRENT_USERSoftwareVirtualDJ. Look for the key ‘CrossfaderCurve’. 1365 is smooth, 2048 is Full and 4095 is Scratch.
Oh and never change anything in the Hercules Drivers with VDJ Open!