icsp programming problem

I'm trying to program a nano with a partially compromised 386 (looks like serial port input line may have taken a hit). I've used Nick Gammon's bootloader sketch running on a good Nano to verify that the bootloader on the target 386 is good.
Then loaded the ArduinoISP sketch from the IDE examples to the good NANO and attempted to upload the 'blink' sketch to the target Nano using 'Arduino as ISP' for the programmer selection in the tools menu.

After uploading completed, the programming Nano was running 'blink' while the target Nano did nothing.

Does the sketch to be uploaded to the target by the 'Arduino as ISP' Nano then replace the 'ArduinoISP' sketch in the programming Nano or is there something wrong with my procedure?

I followed the ICSP to ICSP 6pin connector wiring including pin 5 on the target to D10 on the programming Nano.

Thanks,
JM