I haven't been sequencing for the last couple of weeks so I apologize changes have happened to how XL works. I was playing in 4.2.7 today and have been having some weird behavior when copying and pasting effects. If I'm not mistaken, when I used to paste an effect between two timing marks the effect would usually paste into that space. In 4.2.7 when I am pasting in the space between two timing marks I am getting different behaviors each time.
One time it pasted the effect, but the length of time of the effect went beyond the end of the sequence. The effect was about 2 seconds in a 20 second sequence. Another time the effect was pasted in the space before the gap between the timing marks where I put the cursor to paste. Another time it pasted the effect into the layer below the original but with a length that went beyond the ending timing mark. A couple of times it pasted the effect on the beginning timing mark, but looked to also end on that same timing mark.