Ah, appears that you have have to enable 'Create records...' on EACH leg of the chain, not just the final one. I did NOT have it enabled on the B <-> A link. Turning that on it works fine.
So...now I either have to enable it on that leg or create a new TO and connect B to C directly.
And please note that you are now creating new records in A as well as C--a necessary thing or there is no valid "relationship path" from A to C for your newly created record in C.