Automatic alias overrides non-aliased term children

I have a vocabulary that is organized hierarchically. Like so:

-Parent item
--Child item 1
--Child Item 2

If I uncheck "automatic alias" on the children terms, I can give them a specific (non-automatic) alias. However, if I then edit the Parent item (which is automatically aliased) and click "Save", it reverts all the child terms back to automatically aliased, and discards my specific paths.

I traced this to line 522 of pathauto.module, in pathauto_taxonomy_term_update():

/**
 * Implements hook_taxonomy_term_update().
 */
function pathauto_taxonomy_term_update($term) {
  pathauto_taxonomy_term_update_alias($term, 'update', array('alias children' => TRUE));
}

The part that says "array('alias children' => TRUE)" is what's causing this bug. If I set it to FALSE then it respects the child paths.

I looked at pathauto_taxonomy_term_update_alias() and saw that it is essentially a recursive function: first it updates the term in question, then it runs the same function for each of the child terms. And at the beginning of the function, it checks to see if it should update the path or not:

function pathauto_taxonomy_term_update_alias(stdClass $term, $op, array $options = array()) {
  // Skip processing if the user has disabled pathauto for the term.
  if (isset($term->path['pathauto']) && empty($term->path['pathauto'])) {
    return;
  }
  ...

However, running a dpm($term) at the beginning of that function shows that $term->path is not set at that point, so this function will always run in full, and will always override the paths of child terms.

So first... why? Is there a reason child terms should always be automatically aliased whenever the parent term is being saved? Shouldn't this only happen when running a bulk-update?

And second... how can we fix this? Where should $term->path be getting set so that it can tell this function not to run?

I'm happy to provide a patch to fix this... I just want to make sure I understand what's going on first.