You may have deactivated the Talkback button in the VST Connect plugin, or ctrl/clicked it which overrides the auto-switching. We have also been reported a bug which breaks the link between the Cubase and VST Connect Talkback buttons (see Control Room where you can also set the Talkback button and level). This will be fixed with the next version. So to sum it up, with all default settings, TB will switch off during playback automatically and back on when stopped. Check VST Connects’ TB button (upper left) and Control Room as well as preferences.
the mixed signal is recorded in stereo always. you can use the record pan controls to pan hard left/right if you need 2 separate mono tracks and then split after recording. You may also insert the VST Connect plugin into a Mono Input channel instead of the default stereo one to have everything mixed to mono. Apart from that yes, you need the PRO version to record individual channels (up to 16) in full resolution.