DGN Worksession in Rhino issue with layers not appearing when saved from Connect U10

When opening a DGN in Rhino 5.0 I don't get any layers if the DGN was last saved in Connect U10. If I open the DGN in V8i and save a copy and link that to Rhino I get layers. This is a real pain. Any ideas what Connect is doing to the DGN to cause this?

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