For anyone looking for an Explode CAD option in C#, check out CADability on GitHub:

https://github.com/SOFAgh/CADability

There is a patch needed in the ExportStep.cs file you need to make:

• In the WriteDefinition method, you need to trim the s parameter if it already has a semi-color (the ACIS kernel throws an error when an empty entity is present in a STEP file):

public int WriteDefinition(string s)
{
    int nr = currentItem;
    ++currentItem;
    stream.WriteLine("#" + nr.ToString() + "=" + s.Trim(new char[] {';'}) + ";"); 
    return nr;
}

Next, in your actual ZOS-API application, you will need to inherent the CADability.Project class to access the protected class:

class MyProject : Project {}

And then finally, you need to read in the CAD part, place each GeoObject in a separate Project and save each project:

// CAD file to be exploded
string cad = @"C:\Users\Michael\Documents\Zemax\Objects\CAD Files\CAD.stp";
string dir = Path.GetDirectoryName(cad);

// import the CAD part & convert to a GeoObject list
var importStep = new ImportStep();
var objectList = importStep.Read(cad);

// create a new export step class (make sure to patch WriteDefinition method or else this won't work with OpticStudio)
ExportStep exportStep = new ExportStep();

// loop through each child component and save as an individual STEP file
for (int i = 0; i < objectList.Count; i++)
{
    // create a new project (need to inherit CADability.Project since this is a protected class)
    var pr = new MyProject();

    // create a new model and add the imported CAD objects to the model
    var model = new Model();
    model.Add(objectList[i]);

    // add the model to the project
    pr.AddModel(model);
    pr.SetActiveModel(0);

    // increment filename to be saved
    string fn = Path.Combine(dir, Path.GetFileNameWithoutExtension(cad) + "_" + i.ToString("D2") + ".stp");
    exportStep.WriteToFile(fn, pr);
}

Hope this helps anyone in the future trying to explode CAD parts before actually doing something with them in OpticStudio.