The mute/solo behaviour on Cubase folder tracks has triggered quite a few conversations, judging by the number of prior discussions 
https://forums.steinberg.net/search?q=folder%20track%20mute%20category%3A6
I’m not 100% sure if I’m right on this, so any corrections would be welcome - but it seems to me like the design concept works like this:
Folder Track controls will not override existing solo/mute settings of individual tracks, but only solo or mute all those tracks where neither solo or mute has been set at track level. This helps sometimes and hurts at other times.
And it seems to be a consistent behaviour, but it’s arguably misleading (or as you said “untrustworthy”) user interface design at the Folder Track level.
In other software, UI designers have chosen a 3rd visual state of the parent UI control, for the situation where there’s a mix of settings in the child controls. - For example when the UI control is a checkbox that’s either checked or not, UI designers often put a little “-” sign in the parent checkbox to indicate when the children checkboxes are a mix of checked and not checked.
It think it would be less confusing if Cubase did something similar.