Isolator 6.2.3.0 does not support verify on nested calls?

I was assuming that TypeMock would automatically created recursive fakes and support nested calls to verify method calls. However, I had to use the below code

        private static Environment SetUpFakeEnvironmentToGetSettings(int settingIndex, EnvironmentSettings settings)
        {
            var env = Isolate.Fake.Instance<Environment>();
            Isolate.WhenCalled(() => env.Settings).WillReturn(settings);
            Isolate.WhenCalled(() => settings.ElementAt(settingIndex)).WillReturn(Isolate.Fake.Instance<EnvironmentSetting>());
            return env;
        }

To get the below code working.

        
        [TestMethod]
        [Isolated]
        public void UseTheFirstSettingInEnvironmentSettingsToSetAndGetTheDatabaseConnectionString()
        {
            const int firstSetting = 0;
            var sets = Isolate.Fake.Instance<EnvironmentSettings>();
            var env = SetUpFakeEnvironmentToGetSettings(firstSetting, sets);
            var genv = new GenFormEnvironment(env);

            try
            {
                var cs = genv.GenFormDatabaseConnectionString;
                Isolate.Verify.WasCalledWithExactArguments(() => sets.ElementAt(firstSetting));
            }
            catch (Exception e)
            {
                Assert.Fail(e.ToString());
            }
        }

If I simply return Isolate.Fake.Instance<Environment>() without:
Isolate.WhenCalled(() => env.Settings).WillReturn(settings);
Isolate.WhenCalled(() => settings.ElementAt(settingIndex)).WillReturn(Isolate.Fake.Instance<EnvironmentSetting>());

then I get TypeMock errors. If I do not explicitly fake EnvironmentSettings, the I get a Verify exception telling me that ElementAt was not called.

Am I missing something?