Wanted to add some clarification about MIDI Parts. The initial post above is all about Audio and not MIDI.
Both MIDI and Audio behave exactly the same with regard to Musical vs. Linear Timebase as described above.
However Musical Mode only applies to AUDIO Events and not MIDI Parts. There is no Mode setting that can be turned on/off for MIDI Parts. Basically MIDI Parts always behave the same as an Audio Event set to Musical Mode - MIDI Parts will always shrink & expand to cover the same number of bars even as the tempo is changed.