Craig, your explanation makes perfect sense and that's exactly what the problem was. In my case, what tripped me was X3 automatically set the interleave to mono based on the interface input (L, R, Stereo). Also I had a mono plug-in in the FX bin, that was the aha moment when I notice the mono plug-in, remove the plug-in and now it works.
Thanks for all the helps, I'm sure will have more question as I dig into X3. So far liking it, it's full of hidden gems at the same time roadblocks (if you used to 8.5).