I just tested this (with Unequal option) on my side with Cubase 10.0.10.100. The result is, all tracks are hidden. Only an empty folder stays visible.
The reason is Cubase is scanning the tracks one by one from top to the bottom. And if you hide all tracks in the folder, the folder becomes hidden two. These facts together comes to the result we observe.
Imagine you have Audio01 and Audio02 in the Folder. So Cubase is testing:
Folder: Don’t hide.
Audio01: Hide.
Audio02: Hide.
=> All tracks in the folder are hidden, hide the Folder.