Is Quantize broken in Cubase 12.0.40?

in ‘Project audio’, do you mean the arrange page ? The hitpoints don’t do so either, here. They are displayed only in the sample editor.

Difficult to say, to be honest. I always record everything in linear mode, especially MIDI parts, to be able to adjust freely the project tempo to what has been recorded, before switching to musical mode, but this is MIDI stuff : for audio, and if needed, I use time stetch features, if really needed. So, I would like to be more accurate but, from experience and AFAICS, the Linear mode is more efficient when quantize processes are involved .