Free warp in Cubase 12

You have to set the grid to "adapt to zoom " or “quantize” in order to make that work:

However, there is a bug present in C12, which resets the grid always to “Bar” if you reopen the lower zone by using a hotkey, or switch tab below the editor (If you always double click on an event, it should work).

Lower Zone Editor: grid type switches always to “bar” when reopening or switching tab - Cubase - Steinberg Forums