Nicely done video Robert.
It looked like a very small gap, so, in addition to the points raised by Wojtek and John, it may well be that the gap, or depression, is too shallow to allow the putty to 'take', hence the 'balls' when applying the acetone. If the putty is in such a shallow gap or depression, it's very like it being just on a smooth surface, with little or no depth for the putty to 'key' to, which leads to it still being at least partly soft, but trying to cure. This almost always leads to a break-down within the partly cured putty, which, when 'worked', sanded or otherwise treated, manifests itself as flaking, or, in this case, as the cotton bud is agitating it the 'flakes' roll in to balls.
It may well be that a length of stretched sprue, slightly larger than the gap, laid into the depression and fixed using liquid cement, can then be sanded back flush with the surrounding surface.
An alternative is a bead of CA adhesive, which should be sanded before it's had time to fully harden, otherwise it'll be like trying to sand Mount Everest - with a nail file !
I wouldn't worry about the surrounding raised detail too much - a lot of it is very probably way over scale, and would benefit from being removed, especially raised rivets.
If the depression is very shallow, then a mix of clear gloss varnish (enamel or polyurethane, NOT acrylic), or light grey enamel paint, and talcum powder, 'painted' into the gap, works just like the proprietary brands of 'surfacer', and can be sanded once fully set.
