[Edit: Deleted, as it was really an example of expected behavior, not a problem with the program].
Just to be clear… is the tempo, as displayed in the Transport Bar, different when you switch between “Track” and “Fixed” (e.g. you set a tempo of 90 BPM in the Tempo Track, but, when in Fixed mode, the tempo is still 120 BPM)?
If that is the case, then it explains why the audio changes (visually) when you swap modes.
The audio remains at its start bar position (because you have the audio track set to Musical Timebase, and, presumably, still plays the same (because you didn’t say anything about activating Musical Mode for that clip in the Pool/Sample Editor), so, if Cubase’s tempo changes (because of the swap between “Fixed” and “Track” modes), the audio will last a different number of bars/beats length. In other words, that is all perfectly normal 
.
If, on the other hand, the tempos are identical between “Fixed” and “Track” mode, then I haven’t the faintest idea.
Workaround?:
Using “Set Definition from Tempo” on the audio event before activating the tempo track on my system results in:
a) No change in the start bar or # of bars for both the Audio and the MIDI. Nothing moves visually, all looks in sync.
b) Results in shifting both the start and end times (in seconds) of both the Audio and the MIDI events, and the overall duration in seconds of the track changed (longer in my case). However - the Audio and MIDI tracks were shifted identically, so they were still in sync.
(this is pure guesswork on my part… I suspect that “Set Tempo Definition” is doing so from the Tempo Tack, even when the mode is set to “Fixed”)
Thank you, vic_france, as always! Yes, you are right of course, it is the toggling between Track and Fixed when there are different values that causes the MIDI and Audio to go out of sync. With Tempo Track always set to “Track”, I don’t think set definition from tempo is thing to do.
I’ve just finished changing my preferences so my default project project opens with the Tempo Track activated and locked. I hope that will be enough of a reminder to me to never Toggle it to Fixed it once I’ve made changes to it, at least not if I’ve got MIDI and Audio together. I wish locking the Tempo Track made it so that it couldn’t be toggled …
Thanks again 