The expected behavior occurs for recipients that are marked as a Hard Bounce by the database instance that sent the message that resulted in the hard bounce .
The issue in this Knowledgebase described what happens when the address in question received a hard bounce when mailed by another database instance. (i.e., the email address was marked as a Hard Bounce in a non-production environment that sent the email, or was marked invalid as a Hard Bounce to that address from another organization)
Currently, the system is designed to update the Invalid Accounts, Blacklisted Email Address tab, and contact record for the specific database that originated the Hard Bounce. If you'd like to see updates flow to these areas when the Hard Bounce originates from a different database instance, please vote for the following Idea: