In AN730 (version 2015.01.23), page 11-12, "enable_alt_load" setting needs to be turn on in Advanced.hal.linker of Nios® II BSP Editor. This is to ensure Option 1: Nios II Processor Application Executes In-place From Altera On-chip Flash works accordingly.
This amendment also applies to Table 7: Summary of Nios II Processor Vector Configurations and BSP Settings in AN730, page 25. Under Option 1-BSP Settings column, user shall turn on "enable_alt_load".
This problem will be fixed in future release of AN730.
The following figure shows the correct Advanced.hal.linker settings in Nios II BSP Editor: