Indeed Wix# uses the "canonical WiX " project template as a starting point and it has EmbedCab set to 'yes'. I did not expect this setting to affect performance unless your MSI is huge. Though may be it is your case.
You probably found that you can control embedding via Project.Media element:
Thank you for sharing the solution/work around. I will reflect it on Wiki.
You probably found that you can control embedding via Project.Media element:
project.Media.AttributesDefinition = @"Id=1; EmbedCab=no";
