Taxonomy/category hierarchy lost when editing posts

When editing a post the tree structure of the taxonomy seems to be lost, ie; if I set the following when adding a post:

[x] Top tier category 1
– [x] Cat 1 sub-category 1
– [ ] Cat 1 sub-category 2
– [ ] Cat 1 sub-category 3
[ ] Top tier category 2
– [ ] Cat 2 sub-category
[ ] Top tier category 3
– [ ] Cat 3 sub-category

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Then go back into edit the post it displays the categories as follows, only keeping the tree structure for the categories selected:

[x] Top tier category 1
– [x] Cat 1 sub-category 1
[ ] Top tier category 2
[ ] Cat 2 sub-category
[ ] Top tier category 3
[ ] Cat 3 sub-category
[ ] Cat 1 sub-category 2
[ ] Cat 1 sub-category 3

As you can see it just displays them all of the non-selected categories as a flat list and to confuse things even more it seems to move any sub-categories not selected to the bottom. Needless to say when dealing with large taxonomies keeping the tree structure is important otherwise obviously its not possible to see which is a parent of which.

Does anyone have any ideas how to overcome this? Am running the latest version of WordPress 3.2.1, is this a known bug?

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