I think I forgot to tell you to uncheck “include master clips outside selection”
I do this process fairly often for uprezzing (i wouldn’t say all of the time) and it works fine for me.
Media100 had the most elegant offline/online workflow that I have worked with. The FCP workflow is just different and you will have to start thinking different than you did with Media 100. As a whole, FCP has brought much more creative joy than Media100 did though, but that’s a different discussion.
let me know if this works for you, and thanks for posting all of your settings, that helps a lot.
jeremy
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G5 Dual 2Ghz <> 4GB RAM <> FCP 4.5 <> Kona 2
ATTO 42XS <> Huge Systems 1.25 TB 4105 Fibre