This is the general Vim completion behaviour. For a complete overview, you can do
:he compl-current
But for your specific case (which you require the completion to be in state 2 or 3 (described in the document above). You can simply use Backspace, or Control-H to jump from state one to state two. In state 2 you can narrow the search by typing regular characters. So to complete completion with narrowing:
compl<C-X><C-P><BS>letion
It is totally backwards, I know, but that's how it works.
Edit: You can use the Down arrow key too isntead of Control-H or Backspace, and it has the benefit of not deleting a character.