MIDI Remote - Rubberbanding Issue

Can you back this up with something?
AFAIK, no plugins knows what MIDI CC mode your controller is in when using MIDI Remote (or Generic Remote for that matter). My understanding is that MIDI Remote is an abstraction layer on top of an already existing abstraction layer (which would be Cubase treating any VST automation parameter value as normalized floating point values 0-1).
In your example with an EQ, it shouldn’t matter if you use a traditional 0-127 value MIDI CC or a relative encoder. It is handled by Cubase, not the plugin itself. The plugin should still receive values between 0.0 and 1.0.