when you have selected the midpoint of the first line, you should see the dotted line when you move the cursor away from this midpoint. when you now move the cursor over to the other line to get its midpoint, there should be a little cross left behind at the midpoint of the first line. when you get the dotted line from the second midpoint and move it towards the center, you should then see both dotted lines when they line up.
if however there is another line or something near the center of the rectangle, then a different object snap might try to grab this other line. in this case you might lose the pair of dotted lines.