Hi Rick Knicely,
Please accept my apology for the delayed response.
At the moment the described behavior is expected since the RadTreeViewItems are not aware of the CheckState of their sub items until they are expanded. Therefore the CheckState of the parent items doesn't update when a sub item is checked or unchecked in code behind.
However, I logged the issue as a feature request in our PITS under the name: TreeView: The CheckState of TreeViewItems that has never been expanded, doesn't update accordingly to the CheckState of their sub items
where you can vote for it. If it gathers enough popularity we will definitely consider implementing it.
I also updated your Telerik points accordingly.
the Telerik team
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system and vote to affect the priority of the items