I cannot exactly follow what the source and destinations are for all of the problem states you see.

If you want pitch bend to not function as the Part's pitch bend - you can set the pitch bend range to 0 (for up and down) for that Part. For example - if you want pitch bend to only serve as a controller for something that is not pitch bending.

Your latest sentence is essential! That is the point of my post. I can not set anything that is not pitch bending to Pitch Bend! I want to set Fine Tune and Volume to Pitch Bend - it does not work! When I add those functions to Destination field for Pitch Bend source, I get them over the entire Part, regardless of the Pitch Bend.

Your description is still unclear to me. What I am guessing what your issue is:

"I want to set the pitch bend source controller to something other than the standard pitch bend. When I set destinations to something other than pitch bend, the pitch bend controller still affects pitch. I don't want pitch to be affected."

... and if this is the case, you need to do what I suggested:

you can set the pitch bend range to 0 (for up and down) for that Part

Specifically:

1) Edit the Part you are interested in making the pitch bend stop affecting pitch. Make sure in the bottom-left the 2nd square reads "Common" and is highlighted in blue. If not, touch "Common"
2) Go to the menu (left-hand touch screen): "Part Settings" (left-most column of menu choices) -> "Pitch" (2nd column from left menu items)
3) You should see to the right of middle of the screen two options:
"Pitch Bend" with a down arrow and "Pitch Bend" with an up arrow.

Set both of these to +0, meaning disable pitch bend.

This is the only place to stop pitch bend from bending pitch - which is a default of the controller - and still allow pitch bend to be available for the Source/Destination control matrix.

No, no, we don't understand each other. If you are next to the keyboard and if 3.5 update is loaded to your keyboard, try to assign something else to the Pitch Bend (Fine Tune, Reverb, Volume, etc.) and you will see what happens. The keyboard does not assign the listed functions to the Pitch Bend, but immediately assigns them to the Part, without touching the Pitch Bend! It's 3.5 update bug.

This is currently under investigation. We’ll let you know as soon as we hear something. Standby.

This is currently under investigation. We’ll let you know as soon as we hear something. Standby.

Thank you, Bad Mister.

Happy to report — this issue has been solved. Firmware 3.51.x now available for download. 2/22/2021

Awesome work - thanks for the follow-up. And there's a bonus fix too.

V3.50 to V3.51
Fixed problems;

Fixed a problem in which the Pitch Bend controller could not control any parameters.
Fixed a problem in which the Live Set information in a MODX User file might not be loaded properly, with the result that the link destination Performance of each slot might be set to "Init Normal (AWM2)."

Happy to report — this issue has been solved. Firmware 3.51.x now available for download. 2/22/2021

Does this mean the parameter controller problem was fixed, but not the stepping (not smooth) pitch bending issue that is easily heard here? (also very easy to reproduce on many sounds...):

DX7II Vs MontageOS3.5 PitchBend
https://soundcloud.com/dclowe/dx7ii-vs-montageos35-pitchbend

Happy to report — this issue has been solved. Firmware 3.51.x now available for download. 2/22/2021

Happy to see this