The command is working exactly as it is intended to. In order to create a hole, you need two boundaries. I would suggest using the "Create Edge Breakline" command to create a boundary around your surface. Then remove the edge breakline from your surface members, then add it as a boundary with the one you're showing in this video. That will create the hole you're looking for. If you don't remove the edge brekaline from your surface members, depending on your breakline sampling distance, you may get additional triangles you don't want on the outside of the surface.
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Adam Bower
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