User Permissions Inconsistently Applied?

System

MB 4.6.2
Windows and Web client.
Copy of assets from MB 4.0 to new MB 4.6.2 server.
Once verified we created some new folders, left some of the old folders, and changed either name. location or user permissions on some exiting folders to conform to our new information architecture.

For one particular user we are seeing an inconsistent behavior. We have third party vendors that do pre-press work on our assets for print. Each vendor had a group previously in 4.0. We created a PrePress group and moved the identified users into this new group. We added the group to our folders and gave them change level permissions so they can add their work into folders. We set permissions at a high level and used the "clone to children" option.

Down one level from the original are 4 sibling folders. One folder has the correct permissions and access (we tested with a test user account) and three that the correct permissions, but when you test the access the folders cannot be seen by the test user. (the same test user works fine on one of the folders). The pre-press group appears in the permissions view and all of them have the same access level.

What is going wrong here? Does Clone not work? We have tried by hand, but that has the same effect. Any ideas?

Thanks