Hi again,
I had a look at this today and found that your advice was spot on.
I also found that because I was using a simple instrument track the behaviour is bugged so I switched the midi out to a separate track and all is well.
If you do this with a simple instrument track you get problems as soon as you select
Convert MIDI Controllers to Envelopes... 1) All the modulation data gets deleted, you get a modulation envelope that is a flat line.
2) Modulation does not appear as an option in the automation lanes so there's no way to see the mod data in a separate lane.
3) Modulation appears in the edit filter box, but as soon as you change this to 'clips'/'notes' etc. there is no way to get it back to modulation as it does not appear as an option in the list.
Post a bug time I think?
Anyway it's working fine in a standard midi track so the show goes on!