Hi,
This (standard SAP) workflow has an interesting design.
The 'Approval' step only shows you a text, asking you to go to your leave request worklist and approve the request.
The workflow then waits until it receives an event, notifiying it that the request has been processed... and that event can be POSTED, ERROR, WITHDRAWN, etc
So processing the approval workitem is not enough - you also need to go into the worklist and do the approval yourself.
Note that standard SAP workflows are usually not very good - I guess they are meant to just serve as 'inspiration' for your own workflow developments.
cheers
Paul