If that option is already turned on, then I'm not sure what the problem is. I have a 32-bit machine, and when the option is off, I get an abrupt transition where the incoming clip starts without fading in. I've always been in the habit of turning that option off after installing a new version of VideoStudio. Later, when I separated the audio from the video and tried cross-fading the audio, I couldn't understand why the audio did that, until yesterday.
MotionStudio 3D 1.0; Corel VideoStudio Pro 18.104.22.168 (Ultimate)(Discs), Corel PaintShop Pro 22.214.171.124 (Download)