The Intermediate Table Type property "Common table expression" is not applied on reports that have training metrics in Strategy. Permanent tables are always used as intermediate tables in the report's SQL view.
This is working as designed. With Intermediate Table Type set to "Common table expression", the report SQL is consolidated into one pass. But training metrics are calculated by the Analytical Engine, and intermediate results need to be written back to warehouse tables for further calculation. This results in multiple SQL passes and thus SQL Engine falls back to use the value set in the VLDB setting, 'Fallback Table Type'. This setting provides two options - 'Permanent table' or 'True temporary table'.
NOTE:
The same scenario is also expected to apply on Intermediate Table Type "Derived Table".
Refer to the article below on the limitations of "Derived Table"
KB30257: Limitations of "derived table" intermediate table type VLDB setting in MicroStrategy SQL Engine