Question:

Why does a Vault entry action on an initial lifecycle state not work?

Answer:

For many organizations, there are various updates that need to occur consistently on documents when they enter a new lifecycle state. For example, an organization may want to remove annotations when a document goes into the Approved state so that annotations are not exposed to auditors. Vault provides a set of configurable system actions called Entry actions to fulfill this need. Admins can set up Entry actions for each individual lifecycle state.

For this case, it is working as designed. Vault does not perform Entry actions on the initial lifecycle state when users create a new document. However, if the document moves to another state, Vault performs the Entry action when the document moves back into the initial state.

Related Documentation: 

Vault Help Documentation: Defining Document State Entry Actions