Alloy: Passing $model to controller and data binding

I'm trying to get passing a model through $model to work to allow for simple data binding.

My calling controller does:

var lvlObj = Alloy.createModel("level");
    lvlObj.fetch({id:currentlvl});
    var newLevelController = Alloy.createController("newlevel",{$model:lvlObj,playcontroller:$});
    var nlView = newLevelController.getView();

level.xml:

<Label id="lvlname" text="{label}"/>

Label is an attribute of the level model.

When I run this I get an error:

"'undefined' is not an object (evaluating '$model.__transform[\"label\"]')";

However, if I change my level.xml to:

<Model src="level" id="levelObj" instance="true" />
<Label id="lvlname" text="{$.levelObj.label}"/>

add in my level.js do:

$.levelObj.set($model);

It WORKS! But I want to better understand why the first approach doesn't work.