How does "Single Stage Letter" parameter work?

Based on our understanding and after going through multiple
notes available in support and community. "Single Staged Letter" if
selected as Yes it will print and send a single letter for all delinquencies of
the customer.

However, it is not working for us.

We have tried it with 2 different approaches

1), Staged Dunning on Account Level

2), Staged Dunning on Delinquency Level

1), Staged Dunning on Account Level:

When using staged dunning on account level a single letter
is getting printed for all delinquencies regardless of what we select as a
parameter for single stage letter"

2), Staged Dunning on Delinquency Level

When using staged dunning on the delinquency level separate