I have no problems with cue track conversions.
The only setting that does not work is "Mode: Replace original file on disk and in library". After the first track is converted MC deletes the source file and the rest of the tracks will be lost. This should be fixed because it causes data loss. Some kind of sanity check is needed.
There was a problem with the playback range value which was not cleared when cue track was converted to a separate file and MC was set to include the converted file in the library. This caused erroneous playback behavior. However, this problem was fixed several months ago.
(Playback Range is a library field that contains the exact audio sample range for cue track playback. You can check its value by adding it to a list view as a column or by showing it in Action Window > Tag.)
I wonder if either of the source files (cue or flac) is causing the problem. Were you able to play the cue tracks normally before you converted them?