When you do "Save for this folder and all subfolders", all that happens is the format is saved for that folder, and the 'Use as default format for all sub-folders' option is automatically turned on.
When you do "Save for this folder", exactly the same thing happens, except the 'Use as default format' option ISN'T automatically turned on.
So when you do one followed by the other, you are simply saving a format and then immediately replacing it with another.
If you want a folder to have a specific format, and its subfolders to have a different (non-default) format, you have to set them up specifically.