In an assembly, when one toggles the main assembly to 'Use simplified Assembly' or 'Use Designed Assembly' this is applied to the main assembly only.
SolutionThis is working as Designed.
In order to apply 'Use Simplified Assembly' or 'Use Designed Assembly' to all lower-level assemblies the user needs to hold the CNTRL key whilst clicking the command.
NotesA PR existed for this functionality where it did not work in a mixture of designed and simplified subassemblies. That PR has since been solved with Solid Edge 2023 Update 2 and Solid Edge 2022 MP 12.