Well, the thing is that prefix:: is a special anycast address that
identifies a router on the link prefix::/n, where n is the prefix
length. You had configured a 127-bit link prefix, meaning that you had
only one valid unicast address (last bit == 1) in addition to the router
anycast address (last bit == 0).
Normally, IPv6 networks are supposed to use 64-bit on-link prefixes but
the implementation can be written in such a way that other prefix
lengths can be configured.
Setting your tunnel prefix to /64 is certainly the right thing to do.
MikaL
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