Yes, you are correct. Cubase lowers all the faders upon closing a project. It’s not just 1.7.4, it’s always been this way. It bugged me too when I first started using the MR816 because I don’t always fire up the whole system to practice keys. But honestly, after others complained on the forum and it never got fixed after several updates I found its not that big of a chore to open the editor after closing Cubase and load the preset I made to reset it the way I like it. Once it was habit, it stopped bugging me.
Maybe Steinberg didn’t fix it for a reason, like protecting our systems??