AWS Lambda Function with Chalice not handling SQS messages

Question

I have a lambda function which is implemented with Chalice and I am trying to process SQS messages with it.

The code is implemented based on this documentation: https://aws.github.io/chalice/api.html#Chalice.on_sqs_message

app.py

app = Chalice(app_name='payment-service')

@app.on_sqs_message(queue="payment-service-dev.fifo")
def lambda_sqs_message(event):
    print("MESAGE QUEUE EVENT ", event)
    for record in event:
      print("Process Event")
    return True

The problem is that I am not receiving any logs from the lambda_sqs_message when the Lambda Function handler is set to app.app. However, it works if I set the Lambda Function handler to app.lambda_sqs_message.

Handler set to app.app - Queue events not processed

Handler set to app.lambda_sqs_message - Queue events are processed

I don't think that it makes any sense to have the the Lambda handler set to lambda_sqs_message because this way the on_sqs_message is useless.

Did I misunderstood the configuration requirements and the Lambda Function handler needs to be set to the SQS message handler function, instead of the Chalice instance?