Yes the most senior title does go to the heir of the title, in this case James.
When it was mentioned that James was now the Earl of Wessex I mistakenly thought he was the new Earl of Wessex! I forgot it was a courtesy title.
In the past I don't remember the heirs to Royal Dukedoms being given courtesy titles like with non Royal Dukedoms. The eldest sons of the Duke of Gloucester and Kent receiving courtesy titles I believe was due to the fact that these titles would cease to be royal Dukedoms.
An example, a previous Duke of Edinburgh, Prince Alfred the son of Queen Victoria, had a son also called Alfred, but I don't believe he was known as The Earl of Ulster his father's secondary title.
Edward is still everything he was.
For courtesy titles "they" must have decided to keep it simple for James.
But.....
I think when there are multiple titles (Forfar was a later event) the courtesy titling comes from the earliest title grant?
I could be wrong.
http://europeanroyalhistory.wordpress.com/507
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