How should I apply payments to prior late fees for a NC rental?

As a landlord, I know I can charge a late fee (<=5%) for late rent payments. However, North Carolina landlord tenant law has a provision that I'm apparently too stupid to understand:

"A late fee under this section may be imposed only one time for each late rental payment. A late fee for a specific late rental payment may not be deducted from a subsequent rental payment so as to cause the subsequent rental payment to be in default." (NC GS § 42‑46(b))

As I understant it, if a tenant incurs a February late fee, I can't deduct the late fee from their March payment if it causes their March payment to be short. However, if the tenant's March payment is short any ways, can I still deduct February's late fee? Or do I deduct the late fee from the tenant's February rent payment -- even it if causes the February rent payment to be short?

I mainly ask, because the last time I took a tenant to court for non-payment, I did not deduct late fees from the tenant's payments. Instead, I included the late fees in the listing that brokedown the tenant's balance owed (rent, late fees, damages, etc.). The (nasty, Judge-Judy-wannabe) magistrate made the snippy comment, "Well, if you didn't collect it back then, then you can't collect it now." Er, I wasn't sure how to take that and since NC is practically a third world country, I decided against arguing with her.