Yeah, it's like if you looked at instead in English. No one would consider it a preposition, but rather an adverb that's largely due to the fact that it's one word. It used to be in stead (of) but that wouldn't be the way to analyse it. I think the same is true about things like in relation to. What's the fundamental difference? It's the fact that we accept the tradition to put a space in between the sub-elements, nothing more. Maybe it's a bit weaker than an example such as instead because you can put other elements in the middle with the same meaning ('in reference to' etc.) but these are highly idiomatic structures that could easily have been passed down to us in some reduced form like inrelationto or inreferenceto.
