Exclude Members - Lower Hierarchy Members

Hi,

If I have a reports which has in the rows ACCOUNT A (member only - no children) and it is based on the hiearchy as follows

ACCOUNT A

     ACCOUNT AB    

     ACCOUNT AC

     ACCOUNT AD

If I try and exclude Member ACCOUNT AD via Edit Report / Exclude members it does not exclude ACCOUNT AD. Does Exclude Members only exclude visible members?

Cheers,