The 1099 distribution defined on a vendor record serves as the default setting for each invoice created for that vendor. This distribution can then be adjusted on a per-invoice basis as appropriate.

The 1099 amounts that are tracked for reporting purposes are actually based off of the 1099 amounts of the payment created for a given invoice. If an invoice was subject to a discount, then the 1099 amounts would be different than the total amount of the invoice.

Vendor 1099 default is set to be 50% to box 7.
An invoice for $100.00 is created and the 1099 distribution is adjusted to be 75% to box 7.
The invoice is paid while subject to a 10% discount (Invoice was paid with a check for 90.00)

The 1099 Activity Report will report an amount in Box 7 of 67.50 (75% of the 90.00 paid to the vendor). This is also available from the payment record by opening the payment, selecting Payment, View 1099 Distributions).