According to the manual, the intended use of the Modify Character option is to transfer the stats of a favorite Pencil and Paper (P&P) AD&D character to the game, so I don't see the problem in using it to transfer the stats of a character from the previous game and pretending it's the same character.

I started my party in PoR with 6 half elf fighter cleric magic users, wasn't till later that I realized I would hit the level caps. I "adjusted" all six to humans about 3/4 of the way through PoR. Leveling seemed same as before except no racial level caps. Now I am on the CotAB with 6 human multi class characters that seem to advance equally in each of the 3 jobs at the same time. My question is will the game figure it out by PoD? Should I restart CotAB with a new human party instead?

If you're happy with your party there's no need to change it.

You might want to start SotSB with new characters and try without cheating however if the games get too easy.

Honestly, keeping the party throughout the entire series is definitely a sub-optimal choice. The set-ups that are best in Pool of Radiance do not work well later in the series; in fact, the only one who retains her full usefulness is a human cleric, and even then she is best replaced with a dual-class fighter/cleric.

I'd say a single class Mage is always useful, but a single class Cleric tend to get useless in combat. Fighter/Thieves also are less useful after Curse of Azure Bonds (but still very useful against Drow and Rahshaka in Pools of Darkness).

Weak, yes, but not necessarily useless. Whenever I take the route of a single-class cleric, I always try to have very high DEX on that character along with a magical staff sling. That character won't do much damage, so I use him to finish off any opponents in the single-digit HP so I don't have to "waste" a far more damaging attack of a front line warrior to kill that opponent.

I've always found fighter/thieves to be incredibly useless in the Gold Box games, even in PoR and Gateway. If I want a backstabbing character, it's almost always a mage/thief. The additional spellcasting power is IMO far more useful than fighter levels, even at the cost of reduced THAC0, HP, and lower STR; THAC0 and STR can be compensated somewhat with an Enlarge spell, anyway. And having a second or even third mage - even if capped at 11th level (elf) - is very, very useful. Opening a battle with a volley of three Fireballs while all or at least most of the enemies are still clustered together is a huge benefit. And having a backstabber with a few tricks up his sleeve like (Minor) Globe of Invulnerability, Invisibiliy, or Dimension Door provides a few more tactical options than a fighter/thief.

A Fighter/Thief is superior IMO, as he gets 1.5 APR, while a Mage/Thief only gets 1. Or 3 vs 2 if Hasted. A Fighter/Thief can also use items like Helms and Shields.
The mage class is good for buffing/protective spells; I very rarely need a third character casting Fireball. And if I do, there's always Wands and Scrolls.

I never actually found the mage/thief combo to be all that useful--the resultant character has too few HP to take into combat regularly, and I rarely backstabbed much anyway.

The fighter/thief at least has enough HP to hold his own, and decent THAC0 (which was the big drawback of the thief--they never actually hit often enough to make the backstab useful).

But hey, YMMV.

Starting in Curse of the Azure Bonds, Clerics get a bunch of instant death spells that can be useful. They won't work on just anything, but when they work, they can be quite useful. There's Poison at 4th level (save or die), Slay Living at 5th (save or die, take damage even on successful save), Harm at 6th (almost die, although admittedly I would rather prepare Heal, the only healing spell worth using at high levels), and Destruction at 7th (die, *no save* (!)).

How about a Fighter/Mage/Thief, getting the best of both worlds? You get thieving skills, 1,5 APR, and all the mage spells through 5th level, including things like Dimension Door and Fire Shield.

I never throw my mage/thief into the midst of a battle. That's not where he's supposed to be -- not only because he's too squishy, but also because that's not where he's really useful. My mage/thief hovers around the outsides, never adjacent to more than one or two enemies, and dishes out backstab attacks. In such a case, a high amount of HP isn't necessary because there'll be only one or two enemies who can attack him, and I make sure that he's never the only target an opponent has.

Yes, that's a good character, only downside being very slow advancement. I still prefer a F/T, though.

To be honest, a F/M/T sounds far better on paper than it actually is. While you do get a better THAC0 due to fighter levels, the slow leveling mostly negates this again. Having exceptional STR is also not that much of an advantage when you can simply cast an Enlarge spell to get even higher STR. You'll also have a hard time getting higher overall HP than a M/T because all HP a F/M/T gains are divided by three instead of just two, and the results get rounded down. This also completely negates the +4 HP bonus from 18 CON.

Yes, but the fighter levels still give you 1.5 APR.

The slow leveling is not as bad as you might think for two reasons:
1. These games cap by level in each class, not experience. In CotAB, when your single class mage just maxed out, your F/M/T continues to advance, resulting in less wasted experience (especially notable when you transfer to the next game). In SotSB, your F/M/T again continues to benefit from experience (albeit only slightly) when other characters no longer get any benefit, again resulting in them being able to keep more experience in the next game. In Pools of Darkness, there really isn't any difference between a level 21 thief and a level 40 thief other than 38 HP (or 19 for multi-class) that I am aware of, so slow advancement stops mattering.

Of course, if you do want fast Thief advancement, you could try a dual class Ranger/Thief, who continues to advance at the full rate in the thief class. (It's worth noting, however, that if you dual before level 13, the Elven F/T or F/M/T will end up with better THAC0 due to the racial bonus with long swords/bows, but I don't think you can backstab with those (can you backstab with long swords?).)

Sure you can backstab with longswords.
It's blunt weapons you can't backstab with, which makes the Cleric/Thief (except Kenders in the Krynn games) the most useless combo of them all, IMO.