'The passive is resolved on the action' that is to say that when the action itself resolves it will do so as the changed version and not the original version. That is the misapplication here. The passive resolving on the action not the end result of the passive resolving before the action itself resolves. If it worked your way then there is no point in ever having a passive resolution anywhere else in the action chain.
Ask Damon why it doesn't work your way. I'm sure he could come up with a detailed answer that will outline where the confusion is… hell he might even reverse himself.
That said, I'll bet you dollars to donuts that it is this point, the passive resolves on the action, so when it resolves within the normal timing window, it does so in its new altered form.