In customize menus/toolbars, there's a dedicated right click menu for midi inline editor but when i right clicked inside the inline editor, it still shows the right cick menu for media items(which is mostly audio editing tools). Am i missing something? Tried a clean reaper install and its showing up just fine.

Can you do a screenshot?

You get the media item menu if you right-click over the inline editor top bar. If you right-click over the editor area, you'll get the inline editor menu.

So the default install works, but the one with your settings doesn't? Have you tried with a new project, one track, one item? You don't happen to have another item hiding beneath the one you have open in the editor?

Check the Mouse Modifiers for [Arrange view] [right drag]. Not sure if this is a bug or intentional, but the right-click context menu shown in the MIDI Inline Editor seems to depend on the Behavior that is set for this Mouse Modifier. As example:Marquee select items -> right click in the MIDI Inline Editor shows the MIDI Inline editor context menu Marquee zoom -> right click in the MIDI Inline Editor shows the Item context menu

Good catch solger. Apparently the same with hand scroll and horizontal zoom.