Recording CC data works and is retained in the Matrix. I wasn't clear on the distinction between track automation and CC data recorded as track events.
Another thing that confused me is that I was unable to draw CC data in the piano roll. It only added data for each note event. However after recording the twiddling of the knobs, there is tons of CC data in between notes showing up in the piano roll view.
Now after some experimenting it looks like the snap grid was the reason I could not freely draw CC data. Turned it off and now all is well.
Thanks to everyone who responded!