This is one of the most annoying pet peeves with award waitlisting on SQ. I found out this too recently but some FTers have informed that this has been a problem for a long time. Have complained to SQ via email, phone and chat - yet SQ doesn’t seem to be doing anything about it. It’s unintuitive and time wasting to search for something for X persons, displaying option to waitlist - but when you get to it, waitlist is for fewer than X persons. Especially for flights to and from US where you’re required to input a lot for information for each passenger before being told at the final screen that “there’s a problem and to contact customer service”.
Now I contact SQ via chat before transferring any points to KF with the expectation to initiate a new waitlist.
Meanwhile we should all keep up the pressure to complain to SQ to get them to rectify this bug.