Couldn't see if anyone answered you already, the reason is because they give you a lump sum bill credit for your trade-in. You can also apparently have this applied to your EIP balance so that you do not end up paying anything. The emphasis on this promotion is "zero net cost," for this very reason where they give you the trade-in credit one-time as whole.
Still chatting with them on Twitter, they are saying you can't apply trade-in to EIP balance so that your net cost is $0.
If in worst cast you are able to apply trade-in to EIP balance, it will reduce net EIP balance. Since your monthly payment on EIP plan is always fixed $27.09 this will reduce number of months in which you will repay the loan.
Example.
iPhone 7-32gb EIP TOTAL = $649.99
Monthly = $27.09
Trade-in value for iPhone 6 = $165
If trade-in apply to EIP balance net balance left = $485
Now new number of months since EIP payment is fixed = $27.09
New number of months= $485/27.09 = 17.90 months
Tmobile credit which they apply to monthly EIP = $20.21 (because they already give you tradein of $165)
Rest you have to pay every month= $6.88
So you will pay $6.88 x 17.90 months = $123.15 more to TMO.
This is BS, clear case of cheating. Tell me if I'm wrong..