As far as I know that’s just the way it works. Folding Header 1 hides everything but Header 1. I’ve never really seen a use for it - I would think most people would want it to display all the content that isn’t under another header. It is also the case that the minute you create a 2nd header, ALL the content under it becomes part of that Header, so it’s not like you can have an Intro and Conclusion type thing associated with Header 1, and then use other headers in between to divide the content.