It did have this bug at one point, but that was fixed well over a year ago.
You can check if the mesh is active by using the M420V G-code command in the Luban console. To manually turn it on, you can use M420S. If you are doing the bed leveling process via the touchscreen, it should automatically turn on, but I have found that sometimes the machine requires a restart for this to happen.
The Z-axis movement is often virtually imperceptible. That 0.5mm is the difference between the highest and lowest points across the whole bed, so depending on the size of the model, the bed difference can be quite a lot less. For more information on issues with bed leveling, give this forum post a read: Bed Leveling - Revisited & Detailed