I’ve never seen a problem like the one described above, so I suspect there’s some confusion. Obviously there are diminishing returns as you add cores, but that’s true with any DAW. And cpus generally have lower clock speeds when you configure your computer with more cores, but again that’s not specific to Cubase.
Regarding Kontakt…it’s generally best to turn off multicore processing in Kontakt when using it as a plugin. That tends to conflict with the multicore processing of the DAW. It’s fine to turn that on when using Kontakt as a standalone, but turn it off when you’re using it as a plugin.