My situation is identical to yours and I am confused in the same way you are. I was wondering if you have anymore information.
What I did notice on the documents evidence page is that its talking about a host of non-relevant applications like BNO, child over .... So it seems this document evidence page is not directly related to the information we have provided.
I am also a little worried about sending passports all the way to UK. On another forum it said the passports could be routed to New Zealand. But I am also confused about this part.
Getting birth certificates from the child's grandparents seems very difficult, as I am worried if they are not sent with the passport. The UK passport office will lose them/make a mistake.
Any input from anyone would be most appreciated
All the best
James