Hi Nicholas,
Thanks for the sample. I was able to see that you are using background images for all the root Items and not Text. I reduced you menu down to two Items and still see the same behavior. I forwarded this to our developers to look into. The bug number for this is UWN679 and I attached your email for notification when it is resolved.
Best Regards, Bill Infragistics' Technical Support
Be patient 
Might remove the gif for a while until it's fixed..
