Membership Registartion and Free Trial Not Working

I am having trouble when a new user registers through the payment gateway and is offered a free trial. I'm not sure what is going on but is seems like a few things are happening...

First the user is not being registered to the selected membership level. When I click into "All Members" the new users membership level is set to (visitor).

Second when I click into "Billing" the payment/invoice status is being set to "draft" , but the membership level is being set to the correct membership level.

1) Membership Type
- Set the membership type: Standard Membership

2) Payment Options:
- This Membership requires: Recurring payments
- Payment Frequency: 1 Month
- Payment Amount : $10
- Total Payments: 0 (unlimited)
- After this membership ends: Restrict access to Visitor-Level
- Trial Period: Offer Free Trial
- The Trial is free and lasts for: 3 Months
- Allowed payment gateways: PayPal Standard Gateway

I am also using the code provided in this thread to capture CC details when membership with trial is registered.

I have attached screen shots and support access has been granted.

What am I missing?