It's a very minor issue, IMHO, but from a usability perspective, carrot is correct. The folder linkage graphic does suggest that the topic is directly under the leftmost heading. On one hand, this is a very small, simple misplacement that is very easy to overcome with the slightest bit of thought. On the other hand, it does require thinking, which good usability tries to avoid whenever possible.
I just tried the three display modes available to me, and none of them had any effect on the hierarchy graphic. But if I read your answer correctly, the problem is with the original software and there's nothing we can do about it.
Maybe the software's author could take away that dotted L shape and just add another greater-than sign after the last subtopic. You could pass that along for the next maintenance release.