Anand,
Thanks for posting your results and it is exactly as I thought it would be. Result 1, with A starting at 0% shows the dissolve you were looking for. Result 2, with the A track at 100% shows a cut, no dissolve.
I personally always leave the start of A at 0% and the end of B at 100%. For more complex dissolves I revert to Pixelan Spicemaster.
I assume that solution 1 is what you tried to achieve, right?