The setup:

A side panel is set for auto close when app from it is launched.

In that side panel, another internal panel is located.

Apps are located both in side panel itself and in that internal panel.

The effect:

The side panel closes on app launch for apps lying directly in it, but does not close for apps from internal panel.

Expectation:

As simple panels are containers without their own windows, I’d expect that items in panel close parent window if it set to be closed.

v12.9b3