A: Because the TimeCode Display can also visualize the timing information from an application, in addition to the standard Midi Time Code. While e.g. Pro Tools and Logic Pro require to receive periodical data from any attached external device, Cubase, Nuendo, Digital Performer and Samplitude on the other hand does not need any midi response. So whether it is needed to connect the midi output from the TC Display or not is determined by the application in use.

Q: Is it possible to use MTC (Midi Time Code) for example from SYNC I/O instead?

A: Yes, you only need one midi cable, from the MTC source to the TC Display Midi In.