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I never move books to collections on the reader itself, I always use Calibre to set collections so I avoid the tedious task of sorting them on the reader. But I just tried it manually now like you're doing, and the book is instantly put into the new collection. It also remains listed in the previous collection as well. It does seem like nothing happens and it bounces back to the book title, but if you stop after doing it once and go check the collection you added the book to, you'll probably find it already listed there and you don't have to repeat it.
But again, Calibre is so much easier and faster to manage your collections. Once you set it up right, you do nothing but transfer your books and they're automatically placed into the correct collection you assigned.
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