[Toadling]

What you're referring to as a "Child Project" is actually an action group in OmniFocus. From page 13 of the manual:

Using action groups

The actions in a project can be organized hierarchically. This is useful for keeping track of complicated projects, or breaking actions into smaller actions without creating a whole separate project.

So the "Show full hierarchy" setting in OmniFocus preferences is actually working as expected, showing only the hierarchy of projects or contexts.