Both layouts are only 640x480 in size. You cannot change the screen size any larger than the smallest layout, because there is not enough of the layout to fill the screen. If you change both layouts to 1280x1024 - your largest display size - it works fine.
Note that if you press 'Debug all' and switch to the Log tab, a message is added on the second frame, which tells you this (it's not immediately obvious I guess, perhaps it should messagebox it?).