How does Olidamara’s Bard Spell work?

I’m currently in the process of compiling entry options for the Zhentarim Skymage prestige class. I found a spell that almost certainly allows any divine caster to qualify, but it’s asked more questions than it’s answered. First i should preface this with the actual spell and what it does so the issue is more clear. The spell Olidamara’s Bard Spell (Dragon 342 Pg 42) is a second level spell available to any character that takes the Initiate of Olidamara feat that allows the caster to prepare up to three levels worth of bard spells. This meets my needs because all of the spells required to enter the PrC i mentioned are third level or lower spells on the bard’s list.

However, there’s a problem. The spell is extremely vague as to how it works. It doesn’t specify that you prepare these spells in other slots, and ever other spell with a similar effect, namely Anyspell. prepares them in the slot used to cast the spell. This effectively would allow you to prepare a third level spell in a second level slot if it works this way. I had originally assumed that this spell let you expend a second level spell to prepare a limited number of bard spells in other slots, but I’ve seen enough people claiming that this isn’t how it works that i’m not sure.

Assuming it does work the same way i assumed it does, that still raises questions. Does a cleric need to cast the spell while preparing spells because of how their standard preparation rules work or can you leave slots unfilled and later fill them by casting the spell? Can a Favored Soul or other spontaneous divine caster use the spell to prepare bard spells in their normal slots in a similar way to how Arcane Preparation works?