This issue came about when working on the mcs site with Namics. Here is an excerpt from their email analyzing the problem:

With the deep website-structure (mcs/basel/de) we have the problem that the verticalNavigation and contentNavigation do not work properly:
In the verticalNavigation the pages on level 1 and 2 are shown instead of level 3 and 4 (if we do not have a horizontalNavigation, but also with that we would have a problem). And the contentNavigation is not shown at all.
The reason is that the siteroot-level is not taken into account (in the demo-projekt it is 1, in our case 3).

Problem is the site root is currently hardcoded in stk code. Patches were provided and are going to be attached.