Are we not allowed to have "Else" condition without another condition unless its a Boolean to the first condition then?
On your screenshot the "Else" event was simply empty, it had no sub-events or actions, that's why it did nothing. The next condition after it was not a sub-event under Else, that's why a new item in a new slot was always created.
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Else with boolean conditions works the same way as in many other languages.
But when you use Else with events that pick instances, Else means "if previous event picked nothing". Actually, you don't need to pick all inside of Else block in this case.