Understanding how localized changes in one variable affect others in multivariate time series is essential for diagnostics and decision-making in complex systems. Existing models often fail to capture realistic inter-feature dynamics when simulating "what-if" scenarios, leading to inaccurate or uncorrelated reconstructions. We propose CFORVAE, a variational autoencoder framework that explicitly addresses this limitation by combining temporal decomposition with frequency-domain feature correlation modeling. Our architecture uses a dual-path encoding of trend and seasonal components, each projected into attention-pooled latent spaces, and applies Fourier Neural Operators (FNO) to capture cross-feature dependencies in the spectral domain. This decomposition-correlation design enables component-specific latent manipulation and ensures that local modifications propagate realistically across correlated variables. Through extensive experiments, we show that CFORVAE outperforms state-of-the-art baselines in preserving temporal and feature-level dependencies, especially under adjustment-based reconstructions, making it a powerful tool for interpretable "what-if" analysis and diagnostics.