I read in another related thread, and the manual, that suggested setting LP EQ precision to non-linear for recording, and this corrects the issue.  But why not "Bypass"?
 
I was testing the LP EQ both as a track insert EQ, as well as a master insert EQ, and noticed that as soon as I inserted the plugin anywhere into a project, that there was a very noticeable latency while triggering VST instruments from a MIDI keyboard.  So I selected "Bypass" within the EQ, which did not bypass the latency, only the selected EQ settings were bypassed.
 
So it's seems as if there is some initial processing going on in Sonar with LP EQ, regardless of the EQ settings.
 
I looked at my CPU usage with, and without, the LP EQ inserted, not much difference.  Sonar was using about 3-4% of my CPU either way.
 
I ran LatencyMon, and it stayed green the entire time.  So not a show stopper, but just wondering ... ?

If Bypass messed with PDC it may not be useful while the project is playing.

Project was not "playing".  Was testing LP EQ as a real-time EQ insert effect. 
 
Inserted a soft synth into a new empty project. 
 
Pressed key on MIDI keyboard, note played normally via soft synth.
 
Inserted LP EQ into instrument track, then into the Master bus, then into Pro Channel FX chain, all with same result (one at a time, not all 3 together). Pressed a key on the MIDI keyboard, there was a long delay before the note played via soft synth (almost 1/2 second).
 
Pressed "Bypass" on effect.  No change to delay.
 
Changed precision to "non-linear".  This worked (no delay) regardless of "Bypass" on or off.  Bypass only zeroed the EQ curves effect to neutral (flat).  So I'm assuming that there is a huge overhead somewhere in the Sonar audio engine when the linear mode is engaged.

The Precision settings other than Non Linear require a look ahead buffer for the EQ to work. In order to keep everything in sync, a delay is applied to compensate for this buffer. The Bypass button on the EQ only affects whether the EQ curve is applied or not. The Bypass button does not affect the buffer setup by the Precision setting.

When an effect is bypassed Sonar has to be prepared for it to be enabled at any time without causing problems. So it makes allowances for the buffering the effect requires to function whether it's bypassed or active. If the buffer were only introduced when the effect was enabled then the audio engine would have serious problems keeping everything synced.
 
Pretty much all DAWs work that way and for the same reason. At least, I'm not aware of one that doesn't, or one that can telepathically know when the user will enable a bypassed processor and seamlessly transit from a zero buffer to a buffer that has to be applied to all audio to keep sync between tracks.

Thanks, that's a reasonable explanation
 
That LP linear algorithm must be a bear!
 
I just never noticed this behavior from any other Cakewalk supplied plugin, where just inserting it into the project with defaults had that major audio buffering effect on real-time audio.

The previous LP64 had it too, as does the transient designer.

All linear phase eqs tend to have quite a lot of latency because they need to do a lot of calculations to prevent phasing issues and need to know what the data after the chunk they're currently handling looks like.

Limiters and compressors which "look ahead" have latency for the same reason. Other typical serious latency inducers are some impulse based or convolution reverbs, or plugins which simply need a lot of time, relatively speaking, to do their thing. Audio recording and processing makes the kind of latency even a gamer would never notice in a game, never mind someone doing typical office tasks a major issue. They'd almost certainly never notice 20 or so milliseconds pause while the computer catches up but we do.

Waves are unusual in that they publish the latency introduced by their plugins under the tech specs on each plugin's page. Even if you don't have any of Waves' plugins it's worthwhile taking a look at some because it gives an idea of the kind of processes that cause latency.

I have a MIDI shaped head, therefore all the world appears as a piano roll.  Audio buffers make my head spin

The latency remains so you can turn off bypass while playing back. It will be able to toggle without dropout.