In Max 6, When making cycle~ plays 329.628 Hz, it does not play a half step below 349.228 Hz..... Is this a bug or is it due to my system or what?

cycle-does-not-play-in-tune

Your example sounds correct to me. (Mac OS 10.7.4, Max 6.0.5)

correct to me too (Mac OS 10.6.8, Max 6.0.5)

cycle~ does not play in tune