First of all, bravo for your patience in waiting for a reply! 
The answer is that, in Cubase, this is normal behavior on an Automation first pass (as opposed to Nuendo).
To get the result you desire, you need to add an automation point (of zero, presumably?), anywhere after the loop end, before you perform the automation loop operation.
(This behavior is exactly the same in Cubase 7.5. For info, a few years back, Steinberg did change this, to resemble more the behavior in Nuendo, but it caused such a fury in the forum, that they changed it back again (although, if I remember correctly, I think the problem with it was that they hadn’t yet ironed out a couple of bugs).