Using execution variables in keywords

This isn't working as I expected

Make a Manual test script, and create a new execution variable, call it "test", with a value of "1".

Add a test step that uses the execution variable.

Add another test step that uses the execution variable.

Select the second step and create a keyword from it, and replace the contents with the keyword when prompted.

Execute the test case.

The first step has the value '1' replaced, the second step (inside the keyword), does not, and looks like a button with 'test' (attached)

The documentation states that it's supposed to inherit the scripts...section Rational Quality Manager-->Testing-->Developing Test Cases,Test Suites and Test Script -->Developing Manual test Script-->Execution Variable overview  and particularly the Note: found in the same section under "Using execution variables in manual tests"

We're on version 4.0.3