Hey! Thanks for the report. I was able to reproduce this behavior and I agree it isn't ideal. Looks like tab trees are created in a collapsed state when the sidebar is not shown and the user has no way of knowing this.
Therefore, the ideal behavior would probably be to have tab trees automatically expand even when opened while the sidebar is closed.
I don't recall a discussion about what should happen when the parent tab of a collapsed tab tree is closed but I assume it is intended to have it close all child tabs as well. The wording in Settings → Tabs → When closing an expanded tab seems to support this assumption.