How to reproduce:
1. Open the “BugReportWireframe.zip“ project
2. Double-click “SampleGameObject“ in the Project tab
3. Select on the “SampleGameObject“ GameObject in the Hierarchy
4. Press the “BugReport/Toggle HideFlags for Children“ in the Toolbar
5. Save the changes in the Prefab
6. Exit and re-enter Prefab Mode
7. Observe the Hierarchy
Expected result: The child GameObjects are hidden
Actual result: The child GameObjects are visible but collapsed
Reproducible in: 2021.3.40f1, 2022.3.38f1, 6000.0.10f1
Reproduced on: Windows 11 Pro (23H2)
Not reproduced on: No other environment tested