Easiest to see via a Dojo: http://dojo.telerik.com/@email@example.com/axemE
After pressing Run, press *Select All Rows* which selects all the rows. Now expand 'Daryl'.
Notice how the alternate rows do not show selection.
Now press 'Clear Selected Rows' button and then push 'Select All Rows'.
Notice how all the rows are selected.
In short, whenever rows are selected if they happen to be collapsed (e.g. non-visible at the time) and are alternate rows, they do not receive the appropriate Kendo CSS selection class.