If you can find an installation manual about this model, it should help you figure out how sealed it should be.
If the vent is up a chimney rather than out the back and outer wall of the home with a coaxial vent/intake pipe, then it may need to be open to the interior in this way so that the fireplace has a source of combustion air.
If it is vented through a coaxial pipe, then the pipe should be the source of the combustion air and the unit should be sealed from the home's interior.
It sounds like it's the former, and so the "firebox" is open somewhat to the interior and you smell propane briefly before a draft up the chimney is established. Not the most energy efficient setup.