I think there is a bit of confusion about how tags work:
a note with the text #tag1/tag2 is tagged with both #tag1 and #tag1/tag2, adding another #tag1 somewhere else in the note doesn’t have any effect on the number or kind of tags.
following @krssno example:
#firstlevel/secondlevel
is equivalent (in terms of tags) to a note with the text:
#firstlevel
#firstlevel/secondlevel
Tags are metadata that doesn’t have much information and they don’t carry the number of occurrences inside a note, just that the note is tagged with one of them. What you’re trying to accomplish is just not possible with the current database structure.
While I understand what you’re trying to accomplish, is not what the Hide subtags was meant to be used, the wording is precise and all notes that have a subtag of the tag you’re looking at will be hidden.
This is not something that we can change without making the database structure way more complex, and while your use case is neither good nor bad it’s not what we were asked in numerous feedbacks (mimic a folder structure).
We’ll wait to see if there are more users that were expecting something different, but due to the db structure, this is unlikely to change.