You where clear. So I understand you
My thinkin was just if we did it opposit of yours. Put all the midi tracks in the instrument channel. Link them up there. So you have each channel showing as a instrument channel With midi and audio merged at custom choise. And just flipp what ever to surface and edit.
What ever we load a vsti as, be it rack or instrument, it will have multi channel support. My alternative way of doing it and yours, would look different in the project window, but would look just the same in the mixer window and would translate the same to controllers. I just think a added bounce would be to also do yours. So the users that want project window and mixer looking the same and save track count, could take your approch and users like me, that cant stand looking at a sea of tracks in the project window, could folde the midi in with the vsti audio in one track with smart tools for selecting and editing.
I think it is a good thing to show and tell workflow. There are many ways to keep a daw organized.
And always new things to learn and missing functions to ask for.
If you are not a big user of the visabillity filter option and search functions in Cubase, It will quickly become a nightmare to work on the monster track projects. But it dosent hurt to have other types of organizing options.
This merge function will make life easy for you and many others.
So I support your suggestion