Design task not working on sub sub folders? Is this a bug

We have recently noticed that the design task does NOT update design of databases in sub sub folders?

Examples:

root - updates

root\subfolder1 - updates

root\subfolder1\subsubfolder1 - does not update.

Likewise from the console

load design -d root\subfolder1 … updates

load design -d root\subfolder1root\subsubfolder1… does not update?

Has anyone else found this. Is it specific to 8.0.2. Any hep/comments would be appreciated

Subject: Design refresh prohibited?

For the design element that you aren’t seeing updated, is the prohibit design refresh option selected for that design element? (You can check with the Designer client)