Time Warp not attributing "musical events follow"

[This is in Cubase 8.5]

I played in some midi freely - then used time warp to adjust the tempo accordingly (rubato) [using time warp standard warp grid]
After that I started to clean up the midi - including quantize, as per usual.

But then I find (as usual) that some of my rubato is not natural so I want to tweak that too.

The trouble is that if I select “time grid - musical events follow” it completely ignores me.

This also applies to attemping to write rallentandos or other tempo changes in the tempo track. The click track follows the tempo I’ve written but the midi (and any further midi) still plays at the original speed.

If I copy and paste the material into a new test project it all works normally - whether I rubberband the midi notes or copying a whole region, both work - and I can also attribute timewarp to a single midi track without affecting the others (same point in timeline) - in other words it works as I would expect. But go back to my live project and try again but it’s the same as before.

So the issue must be with the project.

So my question is: Is this a bug? Or am I doing something really stupid and missing a setting somewhere?

If it works in a new project, but not your old project, try exporting the midi data and loading it in the new project. Does it then work in the new project?

Try toggling time base between musical and linear on your midi tracks. It sounds like your midi tracks are set to linear, so no matter what you do to the tempo, the midi events will stay at their absolute positions.