I was playing around with the blank template that came with .9.24B and the context and regular hiearachy modes don't seem to work as I would expect.
The item Company ABC shows all sub-items, even though the sub-items do not meet the source criteria of the AddressBook being checked. If I were to check the AddressBook box for Called Company ABC 2 and do a refresh I get what I would expect, Parent Company ABC with only the sub-item Called Company ABC 2 showing. This is what I had to do for the Item Joe Clarkes, I checked the AddressBook for Called Joe Clarkes 2, this item had the same problem, showing all sub-items when not checked. Am I missing something?