Manager Self Service Approval Hierarchy

We are on 9.2 and are using the manager self-service for employee change requests. We have the hierarchy built in the P05844 with Home BU values and levels (for example BU 123456 and level 1 thru 3) for status change.

We build the R05840 nightly. What we are seeing happen is that the approval progression works fine when the person making the request is level 1 - but when the person making the request is level 2 for example - the approval progression is skipping level 3.

We believed that the person who is requesting would be passed to the F05840 and they would be level 1 and the progression would be to their level 2 and to their level 3, etc.