AndreyB
 
Well, it definitely looks like a bug of some kind 
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Thanks Andrey,
Most likely not a bug but more likely inexperience. 
While playing with it I was trying various things trying to get the apeggario to bounce a midi, like record arming an empty track and trying to record the output to that track or I may have had the track unarmed and not selected. I'll give it another try and post results or upload a video to my YouTube channel showing the steps I'm taking while trying to produce the bounce (if I can't get it to work) or submit a bug report later.     

Now I have to ask another (probably stupid) question.  What is CbB? 
 

DOH! Nvm, I think I got it now.  CbB = Cakewalk by BandLab 

You can split the Instrument Track in two, creating a separate Midi track and Bounce to Clips just the midi clip to get the arpeggiator result. Bouncing the Instrument track will give you an audio clip, like you found out. Instrument tracks seem convenient for doing things fast, but I almost always end up splitting them, having audio and midi in separate tracks is much more flexible for me.