Ads Module - "Category" should display all items within subcategories

In the Ads module, categories and subcategories don't operate the way you would expect. IE - if I am looking at the frontend, and I have "For Sale - Clothing" selected, then I would expect to see all items from every subcategory underneath "For Sale - Clothing" - but it shows only what was posted in that primary category. Typically the workaround for that issue is to change the category field to multiple select and have the user select both category and subcategory - but Ads is designed so that the category chosen determines the fields available to create the ad, so that seems like a bad idea! Instead, it seems like there should be an option to "show child category ads within parent category".

Is there a setting I am missing somewhere, or is this an oversight?