In jQuery 1.3.2 there was a change in how :visible and :hidden selectors work.
Here is more info:

This change affects directly the functionality of the treeview plugin of jQuery.
I am referring to this one:

The expand all functionality will be effected the most since it will be visible for the users that the tree is not expanded entirely, only just the first level. You can see how it happens on the link above, in Sample 4.

There is an easy fix you can do, just open “jquery.treeview.js” file, go to line 42 and change:
replace this line

jQuery(this)[ jQuery(this).is(":hidden") ? "show" : "hide" ]();

with this line

jQuery(this)[ jQuery(this).css("display") == "none" ? "show" : "hide" ]();

You can also download the fixed javascript file from here!