I noticed that the latest CE seems to be responding to clipboard content changes even when I am not doing a clipboard project.
E.g. I copy something, the CE icon on the taskbar will flash.
Please make sure that Clipboard sensitive option is off in the Edit menu.
The thing is, the option you mentioned is disabled and CT still behaves this way.
Then, you may have selected "Bind external editor" option in the Edit menu, which uses Clipboard for binding as well.
That was unchecked too, but for reasons unknown the copy target segs to clipboard was checked. Could this be the culprit?
Yes, it could.