Retainer payment doesn't reduce invoice amount

User has a retainer on a project and applied that retainer payment on an invoice, but the invoice amount did not change because of that.

That's the expected behavior in BQE CORE as you applied the retainer payment after you created the invoice. This only reduces the balance amount, not the invoice amount. To reduce the invoice amount, you need to use the retainer during the creation of the invoice itself from the Invoices screen. Check out this article for details: How do I apply retainers while invoicing.