Sounds odd, given that this method has worked in previous versions of Cubase. I’d have to try to duplicate your work flow in some fashion to see if I’d be able to reproduce this suspected issue with Time Stretch.
Perhaps completely unrelated, I noticed an odd Time Stretch potential issue. I imported a low-fi voice sample to be used in linear mode, “old radio SFX”," Cubase did “something?” whereby the Time Stretch algorithm altered the pitch of the sample. No matter which Algorithm I used on the file, it just kept have i’s pitch altered (raised higher by some imprecise amount) – it was a linear clip, low-fi radio quality (16/44.1 bit wav file), Independent from Transpose Track, not following chord track, etc.
Anyway, perhaps someone else will be able to more readily duplicate your issue and check this. I’ll do some Time Stretch checking out when I have time. If find anything useful I’ll post. Good luck, sorry I can’t offer more immediate help.