New Name rename

If I use "New Name" preset to batch rename a list of files (in this instance photos - .jpg files).
I use <Inc Nr:1> - the first file in the list is renamed .JPG and all of the rest are renamed 02.JPG. 03.JPG, 04.JPG to the end of the list.
My question is - why is the first file in the list not renamed 01.JPG?
Please advise, thanks.

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