I can confirm that I found this confusing the first 1-2 times I used the preferences on mobile but once you realize the logic, it’s okay. The problem is that in order to realize the logic, you kinda need to be familiar with the structure of the web-UI, which is much more intuitive (see however this suggestion). And, one might add, you need to be consciously familiar with menu-logics in general.
I didn’t report this because I couldn’t think of a better way of doing it (and I still can’t, though perhaps colours could help convey the notion of menu and sub-menu. e.g. depending on on which menu-item you select , the colour of the sub-menu drop-down changes?) but I fully agree that the mobile UX of the user preferences page is sub-optimal.