I found that if I launch Cubase 12 while the midi keyboard is switched off, it won’t load/recognise the midi keyboard if I turn it on during active project. The only way to make midi to work is to close Cubase and launch it again while the midi keyboard is switched on.
This issue was non existent in previous versions of Cubase.
Just checked, no issues in Cubase 11. I have created custom mapping in Cubase 12 that seem to fix the issue but only for keys and pads, transport controls do not work. Need to close Cubase and launch with keyboard “on” for it to work correctly.