Closing child Work Order task also closes parent work order
(Roll Up Changes) business rule
After further investigation, it seems that this behavior is expected behavior. The rolling up of states is handled by (Roll Up Changes) business rule below:
This business rule is configured on parent (sm_task) table and runs when a (sm_task) record's state changes. There is logic hardcoded to rollup the state change to its parent.
If this behavior is not desired for Work Orders you may implement a Condition on this business rule similar to below to ensure this business rule does not run for (wm_task/wm_order) records.
Condition = current.sys_class_name != 'wm_task' && current.sys_class_name != 'wm_order'