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Depends on which hair you're splitting. But I'll agree that it depends on the viewpoint. It was designed this way intentionally, hence "by design". I agree that it might not be intuitive from the UI point of view, and the whole concept of dynamic properties, and the checkbox for overwriting any decendant values is inherently non-intuitive.
I guess we'll have to agree to disagree, and luckily Vladimir solved his problem.
/Steve