Just and update to anyone who had the same issue as me.
BIAB Support is great!
I sent a video of the issue into support and Rob sent back a similar video back and by comparing setting and hardware we figured it out.

Here is a copy of my last reply.

Thank you for your video.
I am on Win 7 64 bit. ( looks like you are on something else)
Build 366
I went through and tried to set all my setting the same as you. ( midi driver setting and thru setting)

I did not think it would be the Axiom but I went ahead and tested my Yamaha S80 ( actually routed through the Axiom External MIDI) ... The Yamaha S80 worked!!

Now to figure out what is causing the issue in the Axiom...
Found it ! it was the zones. If there is more than one zone turned on (i.e. sending two or more MIDI channels it will not work in the Window closed mode. (Strange it works in the detect windows open mode.)


Thanks for your help!
Perhaps the developers can look into why it behaves different in each mode.


Studio One (latest version), Win 11 23H2 , i9 -10940X 3.3 GHz, 32GB Mem, a 4K 40" monitor, PreSonus Studio Live III Console as interface/controller. secondarily test on Reaper, Cakewalk, and S1 on Surface Pro 3 Win 10 (latest versions).