Full hierarchy is broken when 1- all grid items meet the source, 2- and hierarchies are deeper than 2 levels.
jsolka was the first to mention this pretty major problem...
(Major unless one is never aloud to work with inheritance "ON", or never should have more than the TLIs meeting the source... ;)
There are already mantis issues 213 and 214 :
1- Hierarchy problem : sub-item appears both as a sub-item and at top level when its main parent is not displayed in current grid
2- Hierarchy is not restored properly when the Parent and Grand-children meet the source/filter, but not the Children
Now there's another problem which pretty much invalidates the 2 other ones, maybe.