Hi,
1. I suspect you mean this option? That is supposed to do that – to hide the child terms, whenever the parent term is unchecked.
When the parent is checked, then all the subcateries get checked as well – but that regardless if this option is enabled or not.
2. I’m afraid not yet. The filters section is at a major rework. Once we can finish that, we will continously add new features – including the dynamically chaning drop-downs.