I have a similar issue - I’m not trying to create a MIDI effect, just one that uses MIDI CCs for parameters (using IMidiMapping).
Steinberg’s LegacyMIDICCOutEvent workaround has caused ambiguity which actively breaks some use-cases. Here’s a diagram I posted in another thread about how MIDI is passed through an effect chain:
Effects which used IMidiMapping used to all function like (3). WithLegacyMIDICCOutEvent, it’s now ambiguous whether they should act like (5).
Any effect could output legacy MIDI events - so if they don’t, hosts have to guess whether they’re MIDI input-only, or whether they’re deliberately absorbing CCs.