A VST MIDI Effect is a VST Plugin that can process MIDI messages. You can select a VST MIDI Effect by clicking the MIDI effect slot's down arrow. The VST MIDI Effect plugins appear in the list's 'VST and LV2 Plugins' section (Windows) / 'AU, VST and LV2 Plugins' section (Mac).
Note: the 'Apply to track' option relies on plugins being able to save and restore settings, so it won't work with demo versions that can't do this.
MIDI 2.0 / MPEVST3 MIDI effects can receive and send per-note Pitch Bend, Volume, Pan, Expression, Brightness and Vibrato Depth. Poly Aftertouch is supported as well.
VST2 MIDI effects do not receive per-note controls. MIDI output from VST2 plugins is converted from MPE to MIDI 2.0. You can avoid this by setting the per-note pitchbend range to zero (in this case MPE to MIDI 2.0 conversion will only take place if the plugin sends MPE configuration messages (RPN 6)).