"Enable MIDI Output" in the "Insert Soft Synth Options" dialog has nothing to do with your issue. This feature makes MIDI data available for use as an input to another track. It does not affect the current track.
As a rule, in MC, it is not possible to record using a plug-in UI. The keyboard in a plug-in UI is primarily for auditioning sound.
I do not have this plug-in but I would expect it would function like most every other soft synth. The instrument track should have the input set to a controller, the output set to the Master bus or a hardware output, arm the track for recording, enable input echo to hear the synth and press record on the transport.