Engine can be started before preglow light is off
When engine is cold, you want to wait until preglow light is off before turning key further to start engine; if engine is warm, you can start engine without waiting.
While red and green lights blinking simultaneously on inner rearview mirror, system will cut off fuel supply to engine, you will not be able to start engine at that time. This is by design as MB wants to make sure only the owners having correct keys and entering car legibly. If it happens with no reasons, bring back to dealer asking for fix.