If you click on a single playlist in a group of lists in the left pane and "set playlist order" it sets the order of the children in that list to the order they are in now.

if you select mutiple playlists in the left pane and "set playlist order' it sets the order of the parent.

if i could select multiple playlists in the left pane, "set playlist order' and set the order of the children of each list selected, i wouldn't care about the soup sorting issue, but i can't speak for the other person(s) who suggested it.