There is a bug in the Tree object in liftweb/framework/lift-modules/lift-widgets/src/main/scala/net/liftweb/widgets/tree/TreeView.scala

object Tree {
def apply(text:String, id: String, hasChildren: Boolean) = new Tree(text, Full(id), Empty, false, true, Nil)
}

The second last parameter on the RHS does not pass through the hasChildren boolean. It should be:
= new Tree(text, Full(id), Empty, false, hasChildren, Nil)