Hi Polaris
The answer to your question exists in the screenshot of table TIP. All three time pairs have the processing type as S (observe Column no. 7). Had the absence been given processing type A, this wage type wouldnt have got generated. Since all three time pairs are S and are continuous, the system adds them up and the condition of min 3.99hours is met thereby generating the WT.
You need to check why is the absence not being assigned prcoessing type A.