Not very well thought out is it?
It does still potentially help with the deposit, but since the government are terrified of you getting the 25% extra without a house to show for it, they have made it so you can use it for completion but not initial deposit at the exchange. Which for the people its trying to help is not convenient at all.
The way round it is having to negotiate through your solicitors to perhaps have the vendor take 8% deposit instead of 10%, with the remainder coming on completion. Which is not ideal, but is possible.
This site has more details:
"While you can use the money you've saved in a Help to Buy ISA towards this exchange, it's only at completion that you receive the mortgage money and Help to Buy ISA bonus; so the bonus won't help towards the home exchange deposit.
Say you're buying a £100,000 property, and have saved £8,000 in a Help to Buy ISA; with the bonus you'll have £10,000, so a 10% deposit in total. You’d have been able to use your £8,000 at the exchange stage but can only get the additional £2,000 at this point of completion. That helps to reduce the amount you need to borrow and cuts the cost of your mortgage rate too."