Have you tried routing it the correct way yet? Out 1 > FRFR, Out 2 > NL12, with FXL inserted before the Cab block.
Yes I have and both ways sound phenomenal; however, I did notice that the Out 2 setup sounds better because that slight hollow sound is gone from the NL12 side. Unfortunately, the effects don't go into both sides (since FXL block is before effects) but I'm working on that.
One point I want to make is that the NL12 does sound ok whether or not the cab sims are on or off. As many have mentioned though, the louder you go the more you want the cab sims off because the cab starts to shake, etc. and sound more like a guitar cab.
I'm still not sure why I was able to hear a better, more separated sound when I put the FX Loop Block between the AMP and CAB blocks with only the Output 1 XLR right and left being used. The OUTPUT 2 knob did not work of course, but I had the I/O settings as "stereo" and the matrix setup in "stereo" and still getting a great, defined sound.
Regardless, it sounds great and stereo rules.