Hi bemi and Steve,
this thread keeps me awake 
. I have done such a lot with generic remote in the past and the “bastard feature” (quote one of the steinberg employees some years ago!) always has been full of surprises. Still it helped in many situations.
I have some thoughts for you and maybe an idea what you could try:
First of all - we all had a good laugh about the strange things that you, bemi, experienced - like being able to switch of the “led” without any effect on the state of the transport (keeps playing). But I think there is a deep reason in that: The transport controls (be it in cubase or be it on an external controller) is a complex thing - more like a “radio button”. This means that concepually it makes absolute sense (note the “s” in sense ;o) to have at least three different entities: The “buttons” (and the actions upon them like “clicking” or “Pressing”), the “state indicators” (Leds, etc.) and the actions that can be triggered. This separation makes sense because some of the transport buttons even change behaviour depending on settings in the program (“Rec”-Button - start play or dont start play immediately). And: The state indication does not only depend on the state of one single button - the play-indicator should go “off” as soon as certain OTHER buttons are pressed (“stop” e.g.) or another example: the play status indicator should light up when scrubbing is active, etc. etc. So conceptually the separation makes sense on a certain level of abstraction - a “state-machine” can handle that they work togehter in a meaningful way.
Now to the idea what you could try:
As a result of what I wrote it could be that there is more than one option in the generic remote to trigger a transport action. “Device… start” maybe is about the buttons only. I remember recently I had a similar situation with a button in the control room. It was reachable via “device… xy” and via “command…xy” and the two triggered different behaviours concerning state-indication (Led on the button). So maybe there is a different access to the transport/start under a different category in generic remote that DOES work correctly because it changes the state and not only adresses the “button start”.
Unfortunately I am not at my Cubase-Computer currently so I cannot try to find the alternative approach. But as I said, I suggest you try to find another way to tell cubase “start” - maybe you find it under “command” or so.
HTH, Ernst