Are you saying the when cocktail dipswitch in mame is enabled, mame flips the screen but doesn't swap the controls? What version of mame are you using?
Hmm... mame source (0.135u3) is setup for two dials, and is designed to switch dial and button inputs. However, in the source, it also says:
"Tempest Uprights Prior to Serial #17426
If the score on your Tempest(tm) is greater then 170,000, there
is a 12% chance that a program bug may award 40 credits for one
quarter.
The ROM (#136002-217) in this package, replaces the ROM in
location J-1 on the main PCB and will correct the problem.
All cabaret and cocktail cabinets will have the correct ROM
Installed."
in a note from Atari, and
" /* The next one is reponsible for cocktail mode.
* According to the documentation, this is not a switch, although
* it may have been planned to put it on the Math Box PCB, D/E2 )
*/"
in mame's commenting.
The first implies the uprights used a different ROM set than the cocktails and cabarets, unless V1 SavannahLion mentioned was matches below serial number #17426. The second hints that instead of a dipswitch, the switch was permanently (soldered?) open or closed for upright vs cocktail, so there was no different ROM sets between the two.
All that to say: I think mame and the ROM is able to do two dails; but you need to set it up right for them to do it.