When you purchase a physical Suica card from a JR East station ticket machine, the minimum purchase price is ¥1,000. ¥500 goes to the Suica ‘card deposit’, the remaining ¥500 goes into the Suica card SF (Stored Fare) balance. When you add a physical Suica card into Apple Pay, iPhone reads and transfers the SF balance into Apple Pay Suica, your plastic Suica card is no longer usable.
What happened to the ¥500 Suica card deposit? When adding plastic Suica to Apple Pay the JR East Mobile Suica system automatically refunds the ¥500 deposit into your Suica card balance (SF). Nice.