Route render function not working as expected, template render works

When a component is rendered inside an outlet from the app route it is not calling(may be not even creating an instance) of PARENT component. Whereas if its rendered inside a template it works fine. Please see the JS Bin below.
JS Bin for problem . First it renders inside a template which calls parent init, click on show modal and you will see the issue, its not calling parent init.

Not sure if i am doing something wrong here. Thanks in advance.