Hi,
Without actually having the .mid file in hand, my best guess is that the Transcription Option for how to handle rests needs to be set differently. The transcription options are set by default to transcribe "live recording", where folks often have more rests than they think they do
Ergo, removing small rests gives a "smoother" piece of sheet music than having a more rigid reading. However, to have that rigid reading, all you need to do is to go to Settings/Transcription Options, and check the "Do Not Remove Rests".
Transcription_no_remove_rests.png
Give that a try and see how it goes.
ttfn,
Sherry