Yah, if its the allin for 700 and SB folds and its only the BB, 700 of the BB the 500 SB and the 700 AI call go into the main pot and 300 goes into a side pot that only the BB is in contention for.

Think of it this way

Blinds are 5000/10000. Player A and B are heads up with almost equal stakes but only a difference of 2 freaking chips. Play B loses an allin and is left with 2 chips. He's AI in the SB, it would be silly for the main pot to be 10002 chips.

-'rilla