i don't know what they do but i suspect it's much more about the control of data than termination of existing awards. if just 5% of letters with birth certificates omitted the child benefit number, it would cause a massive admin problem at child benefit centre just through sheer scale. i can remember the days when CBC was in a mess and it wasn't pretty... in the old clerical days, they used to have a shorter, supplementary claim form for additional children btw, but it was still a claim form, and again, i think it was for controlling data, rather than treating as new claims leading to new awards rather than supersessions, so yes it does seem a bit of a mish mash...
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