You are right Nguyen!!
Actually, I had read thru the GSM specs very quickly(one should never do that) and missed out the most important part. It clearly says, “MSC-A shall retain overall call control until the call is cleared by the fixed subscriber or the MS and there is no further
call control functions to be performed (e.g. servicing waiting calls, echo cancellers)”.
I knew LU takes place over SDCCH but my above misconception was causing the confusion in my mind.
Many many thanks for clarification.