There's a Morph Effect, and there's also a Morph feature.
The morph feature is a checkbox on the Layer/Timing window.
It will morph/fade/transition from Effect 1 to Effect 2. That could be considered a fade.
If you have Effect 2 as a dark color and layer morph set, the output to the lights will appear to fade.
Most folks just use the fade in/fade out option and it works.