EDIT: SOLVED (a bit):
Reinstalling Cubase did not help. Some preferences sit beyond the installation itself.
HOWEVER - I discovered the Safe Mode function (you have to click CTRL/CMD + SHIFT + ALT) when you launch Cubase (before the splash screen with loading appears). I disabled preferences (it resets Cubase options - even though I tried it manually in “Preferences”). It helped, crossfade works for now.