As far as I can see in the code, it has been meant to always render all pages belonging to tree attached to particular sitemap so that e.g. an user can hide a page on demand or revert such a change if the constraint is gone. The service however iterate over the nodes only in vertical axis, it never moves back to pages on the same level of a parent hence effectively hides a significant part of the tree implicitly.

Following the demo-project tree, pages like /demo-project/about/history or the entire /demo-project/news-and-events/news-overview subtree is not rendered by the subapp, although it's included in the resulting sitemap.