Just some thoughts that may….or may not…help.
Pure guesswork,though,so don't be disappointed if all fails.
I see that in Cubase the Kronos is shown as Kronos 1 Keyboard for midi in and Kronos 1 Sound for the out……
On mine it just shows….
Kronos Keyboard for the in(that's the controller).
and
Kronos Sound for the out (that's the instrument).
Without the number.
Not sure if there could be something wrong with the instrument set up…or not..??
Noticed your audio is active…..again,not sure if this affects anything,though.
The volume for track 1 midi, is at its lowest position…
Test to see if it will also control the volume slider on the Kronos.
Kronos Settings....
Global page/Midi Filter/Enable Exclusive.
In sequencer mode all should show BTH……(you've confirmed this is correct).
Cubase settings....
Check Devices/Device Setup/Midi Port Setup……
It should show the Kronos in and out visible/active.
(I mention this as they can be hidden by choice which will render the port inactive).
Also,check the midi filter page (under preferences) to make sure there's nothing set on track 1.
Forgive the disjointed suggestions….
That's all I can think of for the moment.