The capo feature of tablature is not working correctly as you can see for yourself or in the screenshot here.
More, changing the capo seems to transpose all the notes in a very strange way.
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I admit I do not know much about tablature notation, but the notes seem ok to me?
If the capo goes to the 2nd fret (and becomes the 0 fret itself):
- playing on the first fret of capo’ed string E will give a G, then you have to play A and Bb on the E string as well because the capo is in the way, then:
-C is on the first fret after the capo, D on the 3rd, then:
-E natural open/0 fret (capo is on the 2nd fret of D string), F 1st fret, G 3rd fret.
The only thing missing is notation that says “Hey I’ve put a Capo on the 2nd Fret!”
I am really curious over what’s wrong in this situation!
No, that is incorrect. When using the capo the 5th fret does not become the 3rd fret if you put a capo on the 2nd. Guitarist still want to use their fret markers and usual fret location memory…
The values are absolute, not relative. Perhaps some players that could be appropriate, though.
edit: I see that I may in wrong as tablature does seem to treat the capo as the nut. I have always seen it as an auto-fretting tool. But anyhow it seems illogical to me even it is the norm it just means that you can’t use your knowledge of the guitar to read it.
I’m a guitar player and I’ve always seen it used relatively. Are you a classical or jazz player?
rock 
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Back when I bought guitar magazines; I remember they notated capo tab in the same way. (relative to the capo) I imagine this is standard…? I always found it difficult to read through though.
Hi. Apologies. I answered this on my phone the first time and missed your point.
I thought you were right at first, but when I recreated your MIDI part, sat down with paper and pencil and my guitar, I was surprised to find that it is actually correct. There is no error.
I don’t know how best to explain it to you. One way to set you on the right track I think is to look at each number in the guitar tab and subtract 2 from it, because the capo is on the second fret. When subtracting 2 gives a number less than zero, then you move down a string and start from 5 and subtract 2 (if we used the B/5th string, you would start from 4 of course). When you do that, you get the tab that you displayed in your Cubase screen cap.
I think the confusing part is that now the guitar tab and staff notation display different notes! So I would have to say that the capo function is intended only for working out reasonable fingering for the part written on the staff and is not an interactive editing tool. It transposes the guitar tablature correctly, but doesn’t change the staff notation. I guess it’s up to the user to make sure they match. Seems like they didn’t put much thought into this feature. I would say this needs to be fixed.
I’m going to make a feature request post of this.
There’s now a mismatch between the notes in the tab and the notes on the staff
Ah, I see. You want the capo to make the guitar into a transposing instrument essentially. So that when you put your capo on the 5th fret for example, your notation still allows for an open low E, when it actually produces an A. Sort of a quartino guitar/guitar in F. And when you write F below the staff, it would actually be a Bb. I think I get it.
In that case, a capo mark should (optionally) insert a transposition change too, according to the fret number.
Given the way it currently functions, it would be FAR easier to do the transposition in the MIDI editor: highlight all the desired notes and use the up or down arrow keys to transpose. Shift + arrow does whole octaves at a time. Then you go back to the score editor and use the capo feature to make tablature of the transposition playable.
I did create a feature request for this:
But that transposes sound too. I’m not sure I’m getting it after all.
Please see the example below and tell me if I’ve got it or not.
We have a little musical phrase: Bb A Bb G. Let’s bring it over to guitar.
No capo
-
Tablature
A1, 0, 1, E3 -
Notation: Bb A Bb G (key signature 2 flats, G minor)
Capo at 3, version 1
-
Tablature
E3, 2, 3, 0 -
Notation: Bb A Bb G (key signature 2 flats, G minor)
Capo at 3, version 2
-
Tablature
E3, 2, 3, 0 -
Notation: G F# G E (key signature 1 sharp, E minor)
Now, in all versions, what sounds is Bb A Bb G. MIDI notes should always remain Bb, A, Bb, G so that the piece sounds as it should. It’s just notation (score) that is transposed in version 2, as a transposing instrument would.
From what I gather it’s version 2 that Cubase doesn’t handle automatically, right?
(Sorry for hammering, but I think it’s best if we made it absolutely clear what is requested here, so that there is no ambiguity in regards to implementation.) 
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Hammer away! You’re right. As you’ve pointed out there are two ways of looking at using a capo, and I think both are legitimate. One way is to make playing in an existing key easier while remaining in the same key, the second way is to transpose a song to a different key, often to accommodate vocal or other instrument range.
So perhaps the feature request would be for a check box to transpose when the capo is applied? Do I have this right now?
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After this came up, I decided to go back and look through some song books and I actually found both, though I found more that were relative.
Yes, that’s it. Handle the guitar as a transposing instrument when a capo is applied.