Hey,
You almost certainly have a CPU bottleneck any time the GPU is underutilized.
If the GPU is underutilized it's either:
a) CPU bottleneck, or
b) FPS bottleneck (cap set such as VSYNC ON to cap at 60FPS/60Hz monitor)
*When you raised GPU usage by tweaking settings you likely put more load on the GPU relative to the CPU (8xMSAA for example is very GPU intensive).
Every action still uses the CPU so your FPS always drops (if not capped) though it may not be significant or you may not care.
**In general you should set a GOAL (such as Adaptive VSYNC forced per game and getting 60FPS at least 90% of the time) then tweak towards that goal rather than worrying that your GPU is underutilized.
If the GPU is not the bottleneck, the CPU probably is and vice versa. It varies by the game, hardware, and settings in the game.