I have set up EachAdditionalAmount flat shipping disocunt using SetShippingDiscountProfiles call. Although I have listed items using AddItem with the proper DicsountProfileID, discounts are not applied on shipping cost for additional items in my listing.
In your AddItem request, if the ShippingServiceAdditionalCost is "0" or has a value lesser than the discount value applied for shipping additional items, the discount rule will be ignored. The shipping logic will pick whichever is cheaper between the discount value and the ShippingServiceAdditionalCost.
Also, the cost for "Each additional item" will appear as FREE if <ShippingServiceAdditionalCost> was set to "0" in the AddItem request.
Please note that the discount profiles are applied on a per-site basis. This means if you create a discount on the ebay.com site, it isn't applied when you view the item on ebay.au site. Whereas, the same item, when viewed on ebay.com, will have discounts applied.