Hierarchical reporting w/ duplicate children -- fail?

I have a hierarchical report in CR XI displaying a directory structure that is mostly working fine. However, there are some duplicate folder names in various spots in the tree, and they are being grouped together under one of the parent folders instead of arranged separately under their various actual parent folders. Example:

ParentFolder1

Development

Production

ParentFolder2

Development

Production

ParentFolder3

Development

Production

Is being reported as

ParentFolder1

Development

Development

Development

Production

Production

Production

ParentFolder2

ParentFolder3

The directions for a hierarchical report specify that you group by the child object, so I can see why two different child objects with matching names would be grouped together, but with Hierarchical Grouping Options indicating the parent folder of each child object, shouldn't both factors be taken into account, so that the child objects with matching parents get grouped together? The rest of the hierarchical report is fine, it's only having trouble with these matching-name children.

Thanks!

Brad in Raleigh