On both the livedemo example and in my code I see the same problem. For subgroups, the iconExpandedGroup and iconCollapsedGroup values display twice and only the outer icon updates when the state is changed.
http://livedemo.exadel.com/richfaces-demo/richfaces/panelMenu.jsf?c=panelMenu
On the above example, if you expand Group 2 and then expand Group 2.4 you will notice a second 'disc' appears to the left of Group 2.4, which will remain no matter whether you re-collapse or re-expand that item. It does appear that the top group icon works properly in both the example and on my page.
If anyone has a workaround for this or an idea of how it can be prevented, please let me know.
Thanks.