That’s because you are on Mac, where Interpolate Audio Waveforms cannot be disabled because of a bug. It is enabled all the time even when the box is not checked.
Interpolate Audio Waveforms = Smooth Waveform Drawing, this is the same thing, in Cubase 12 Smooth Waveform Drawing was added as an improvement to Interpolate Audio Waveforms, but again since you are on Mac you can’t see the difference.
The official topic about these issues is that one, which includes all of the 3 issues related to the Interpolate Audio Waveforms setting :