EntityMalformedException: Missing bundle property on entity of type node. in entity_extract_ids() (line 7663)

under Additional behaviors options Entity reference current is enabled with default options like

Action - Do Nothing
Fallback behaviour - Do Nothing
Skip access permission - None.

Actual need of this module is for content type as mentioned here.
Enabling the option rises the error
EntityMalformedException: Missing bundle property on entity of type node. in entity_extract_ids() (line 7663)
when backtracked call was made from
$entity_ids = entity_extract_ids($target_type, $entity);

I also checked it by creating simple content type with basic fields title,body and the entityreferecne field.
Modules versions
Drupal 7.22
Entity API 7.x-1.1
Entity Reference 7.x-1.0
Field 7.22