AUDACITY CREATING UNWANTED SILENCES

‘Pseudo Stereo’ is a “Nyquist effect”.

One of the limitations of Nyquist effects is that they treat empty track space as if it was silence. Thus if the selection includes empty track space, it will be converted to silence by Nyquist effects.

You may be able to work around this limitation by applying “Truncate Silence” after the ‘Pseudo Stereo’ effect has run.
(See; https://manual.audacityteam.org/man/truncate_silence.html)