"Replace with Clip.. from source monitor" with source sequence only inserts nest (despite button toggled off)

Situation is following:
I have a sequence open and another one in the source monitor as source sequence.

The nesting of sequences is toggled off and normal insert inserts the selected video/audio tracks instead of the nest.

I want to replace a clip with part of the source sequence:

• I highlight the clip I want to replace in the sequence
• I set in/out in the source sequence
• I hit the key combination for "Replace with Clip.. from source monitor (Match frame)"

What I expect to happen:

• the clip gets replaced with the patched video track

What happens:

• the clip gets replaced as nest (with all video tracks)

it seems like the button for nested sequence import isn’t working with that command.