[2019.1] Live Editing feature not working on Instantiated GameObjects?

Unity 2019.1 allows you to live edit nested prefabs as long as you drag the prefabs onto the scene. However, instantiated Prefabs act as an original prefab instead of a nested prefab, which makes them not applicable to live editing.

I find this really strange since no game places gameobjects directly onto the scene unless the game has a static map, and usually relies on instantiating by code. Am I missing something or is this a feature not provided by Unity?

https://www.youtube.com/watch?v=5q1An6SFe40