[Orgmode] VISIBILITY:folded hides all empty lines after heading if org-cycle-separator-lines is set to negative

[Tom]

Here is an org file:

---- file begin -----
    * test1
    :PROPERTIES:
    :VISIBILITY: folded
    :END:
    ** test2




    * test3

---- file end -----

org-cycle-separator-lines is set to -2, so org should hide one empty
line after the heading when it's folded and leave the others there.

If I fold the test1 tree with TAB then it collapses only one empty 
line after test2 and leaves the other empty lines, so this is correct.

If I add VISIBILITY:folded to the test1 tree then and reopen the file
all the empty lines are hidden after test2 regardless of how many there are.
If I then unfold and then fold the test1 tree manually with TAB it 
works correctly.

So it looks like VISIBILTY:folded doesn't take the negative value of
org-cycle-separator-lines into account.

Org-mode version 6.33x