Thank you for noting this issue. It is indeed not working correctly. We will have it fixed in the updated version of the Courseware. Until then you can introduce the fix in your version as well. Please, note in the code-behind file the RadContextMenu ItemClick handler - RadContextMenu1_ItemClick. You should change the check for the clicked item's level to 2 instead of 1:
As a sign of gratitude, I have updated your Telerik points.
the Telerik team