Transfer accounts are seen as Expense accounts. Therefore the transfer accounts used to balance the entries by fund bring the net activity of the Fund Balance to 0. This is why there appears to have been no change to the Fund Balance Account.
There is a Debit to a Revenue account in Fund 1 and a Credit to a Revenue account in Fund 2. The accounts used to balance by fund are transfer accounts which are coded as Expenses. To balance the Debit to Fund 1 there is a credit to the transfer account in Fund 1 as well. The Debit to Revenue and Credit to Expense creates a wash which will not be reflected when viewing the balance of the Fund Balance account.