The other day it was "I left out one critical piece". We'll get it all out of you yet.
I suppose it wouldn't be very unique if it was the exact same as another.
The easy way to "fix" your concern... unless you plan to create several or many "Atari Classics" playlists, is to set the unique name to "Atari Classics" (vs. "stonev Atari Classics"). Then in that view, that's what will show. Just make sure to set the parents/nesting accordingly to match your intent.
To answer your original question, yes. That is the expected behavior. And I'm pretty sure there is no innate 'switch' to display one or the other.
That said, it may be possible to edit the theme's view to force displaying the Nested Name. But I don't know for certain as I don't 'do themes'. If this is the route you wish to pursue, AND if it's even possible, the themes author may be able to help.