24B Opt-In: Automation of Invoicing and Receipt Applications for Advance Payments

I'm bit confused with the invoice balances for Prepayment and sales invoice.

I have created prepayment invoice with 500EUR

Accounting entry:

Then i have loaded sales invoice along with negative prepayment line, it created two separate invoices which is somewhat illogical.

And Accounting entry for Prepayment Application invoice is,

Accounting entry for Sales Invoice is,

Question1: What is the use of creating prepayment application invoice with negative amount if this is not getting applied to prepayment invoice?

Inv:1004003 should get applied to Inv:1005003 and reduce the balance from 500EUR to 250EUR

Question2: Is my understanding correct? or is this how oracle new feature works?