[BUG] Hidden Members Visible in "Who is Online"

I have discovered that the problem with hidden members being visible to all within the "Who is Online" block only occurs when the member has set "Show me online" to "Only friends". The function appears to work correctly when set to "No". I believe that all functions work correctly when viewing the online list by clicking on "View complete list" (viewonline.php).
I tested this out on my site and here at IM2 by changing the settings for my account and viewing the results through another browser platform which viewed the site from a non-member perspective. It plainly showed me as online within the "Who is Online" block when I set "Show me online" to "Only friends" for my account at PCP-->Profile-->Profile Settings-->Privacy.
[strike]As a side note, and quite possibly a different problem altogether, my installation of IM 1.4 only shows the above setting option under the Privacy section of PCP. I noticed the following additional variables here at IM2:
After viewing my settings in ACP, I realised that I had set the above variables as constants by setting "Override user choices" to "Yes" for these options.
I tested this out on my site and here at IM2 by changing the settings for my account and viewing the results through another browser platform which viewed the site from a non-member perspective. It plainly showed me as online within the "Who is Online" block when I set "Show me online" to "Only friends" for my account at PCP-->Profile-->Profile Settings-->Privacy.
[strike]As a side note, and quite possibly a different problem altogether, my installation of IM 1.4 only shows the above setting option under the Privacy section of PCP. I noticed the following additional variables here at IM2:
- Always show my e-mail address
- Accept private message
- Display my web information
- Display my messengers references
- Display my personal information
After viewing my settings in ACP, I realised that I had set the above variables as constants by setting "Override user choices" to "Yes" for these options.