Yes, embedded cue sheets are known to cause problems with duplicates.
What are you doing to detect the cue sheets? As far as I know that's not possible, but I haven't worked with cue sheets much.
You can use the Manage Duplicates tool to put duplicates in a playlist. Since duplicates are the issue, maybe that will help locate the cue sheets.
And yes, the cue sheet button only shows up if there is a cue sheet. I don't know if cue sheets are indicated in the tag inspector, but if so that may be a way to bulk delete them.