I opened up an old project. The Preferences setting is carried over so I re-enabled MDI. Closed CW and restarted and then opened the older project again. Next I clicked on the title bar of the project window and selected docked and the project window jumped to the left as I expected. Then I clicked on a file and it opened up in a window. Clicked on another file and it too opened up on a window in front of the first. Then I did a search files for a variable name and the search window opened up on top. I double clicked on one of the found locations and that file opened up on top of all my other windows. Also dragging the window up near the top of the screen doesn't suddenly make it try and dock across the entire screen.
So an old project behaved as expected.
I then went back to one of the two projects giving me problems. Same process. Right Clicked on the menu bar of the project to dock that window. Perfect so far. Opened several files. Still seemed to work. Did the search process. Both the search dialog and the results dialog did not show up on top but instead were behind the other windows. Both are marked as MDI Child. However this time the file window that is created when double clicking on one of the search results is now marked floating rather than MDI Child. That's changed since the last time. It still tries to dock a floating window when brought near the top of the main window.
Obviously there are is something somewhere that CW looks at when it decides to with file windows since in one case the search window is opened as MDI Child while in the other project it's opened Floating.