I have exactly the same issue.
In the simple example that QlikTech has provided, selecting a parent node automatically selects all the children as well.
With my more complex data, it simply doesn't work. The data looks accurate and the result of the hierarchy statement makes sense. The Treeview also displays the hierarchy correctly. But the problem remains: selecting a parent node does not select the children. Which makes the Treeview essentially ... useless.
Perhaps this is a QlikView bug?