SAM launch configuration for Flag function does not pass payload to lambda

[asunar]

This is not an issue with code. I would like to learn why SAM is not passing payload to lambda. I have added launch configurations for both SubmitApplicationFunction and FlagApplicationFunction in Cloud9 as shown below.

Running SubmitApplicationFunction launch configuration works as expected passing the payload to lambda, however running FlagApplicationFunction launch configuration does not pass payload to lambda.

Both functions work when running with aws lambda invoke

Any ideas on what I may be doing wrong here? Thanks.

{
    "configurations": [
        {
            "type": "aws-sam",
            "request": "direct-invoke",
            "name": "workshop-dir:FlagApplicationFunction",
            "invokeTarget": {
                "target": "template",
                "templatePath": "workshop-dir/template.yaml",
                "logicalId": "FlagApplicationFunction"
            },
            "lambda": {
                "payload": {
                    "id": "application_e63632fe-d277-47be-a763-7472e0c6bd70",
                    "flagType": "REVIEW"
                },
                "environmentVariables": {
                    "APPLICATIONS_TABLE_NAME": "StepFunctionWorkshop-AccountApplications-step-functions-workshop"
                }
            }
        },
        {
            "type": "aws-sam",
            "request": "direct-invoke",
            "name": "workshop-dir:SubmitApplicationFunction",
            "invokeTarget": {
                "target": "template",
                "templatePath": "workshop-dir/template.yaml",
                "logicalId": "SubmitApplicationFunction"
            },
            "lambda": {
                "payload": {
                    "name": "Spock1234",
                    "address": "1234 Enterprise Street"
                },
                "environmentVariables": {
                    "APPLICATIONS_TABLE_NAME": "StepFunctionWorkshop-AccountApplications-step-functions-workshop"
                }
            }
        }
    ]
}

[asunar]

Same behavior with sam 1.18 and 1.19