You are not doing anything wrong. It's a missing feature in Reaper.
The track faders are only effecting audio volume. To effect midi volume they would have to send midi controller 7 on the channel you wish to effect.
Neither do Reapers track faders send any midi controller nor is there a midi out channel select for tracks so that they would know which channel they should send the controller on.
Both would be worth a Feature Request.
You could try and see if there are automation parameters for the sound canvas volume that you could use.
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