I tried this plugin together with Collapsing Archives plugin made by the same author.
Parent / Child relations issue
The issue is that it sets every category as the child of another category, even when there is no hierarchy set. The top category changes depending on the sort order i.e. the first category becomes top in hierarchy and the second one becomes the child of the first one, and it repeats for all categories. Please see the example below.
In this example, I made no hierarchy among categories. All categories should have been flat. In addition, the Monthly Archive widget, using collapsing-archives plugin, is placed at the bottom of the hierarchy. The two plugins seem to be mixed up? Or just the issue on Collapsing Categories causes this.
The setting I used in the above example is this;
Plugin Download Page:
Plugin Author's Page: