This is the intended flow for this tree setup. We check transitions from leaf to root looking for the first valid transition.
In testing some cases with this, I did stumble onto an issue where having multiple transitions using the same event on the same state picks the first transition in the list even if it is not the highest priority event transition. This seems to be due to how the event is consumed by the first transition in the list and no longer exists for other transitions. Non-event transitions will still pick the highest priority transition, and that behavior should be the same for events as well. We will look into this issue.
-James