This seems to be how it works to me. If I prepare cure wounds on my wizard, I can cast it as first or second level.
Understood, but I suspect you clicked the 1st level Cure Wounds. That works fine.
But, the UI will allow you to prepare it by clicking the 2nd level slot. That removes it from the 1st level slot. But, more to the point, makes no sense in terms of how spells are prepared.
