I suspect this is a legal loophole. The initial deposit is not a bond therefore doesn't need to be with the RTBA, it's a contract you enter with the agent. Then when it is technically refunded it becomes part of your bond, this is legal.

Some tenants apply for many properties and then take their pick of the accepted applications. This is causes issues for agents and other potential tenants. I am guessing that is what they are attempting to avoid.

If you have every intention of taking the property if approved and they are a legitimate and registered agent I wouldn't worry too much about it. It's a contract, they are held to it as much as you are.