Hey, harmonik,
This is a normal function in all DAWs I’ve used. The idea is that the superfluous nodes are removed, leaving only the minimum number of nodes left in order to recreate your envelope. This is changeable.
From the Cubase manual:
When punching out, this function will remove all superfluous automation events so that the automation curve contains only the events necessary to reproduce your actions."
When you release the mouse button, the number of automation events is reduced, but the basic shape of the curve remains the same.
This “thinning out” of events is governed by the Reduction Level setting in the Automation Settings section of the Automation Preferences
You just open the Automation Panel (F6) and then click the little gear icon at the bottom left. Adjust the percentage lower for more nodes.