Honestly, I am unsure if this can work in general. How would you expect this to be represented visually? Maybe I am just missing some imagination…
You could have a look in the web developer console if the HTML tags are generated in general by the Vue scripts. If yes, then it is most probably hidden by some CSS magic to make it look “good” in general. Can you maybe sketch/mock what you want to achieve?
OK, with NcAppNavigationItem, the children are handled explicitly. Looking at the NcListItem, you will not see similar lines.
You could file an appropriate PR if you think this is useful. Apart from that, I would redirect you to the frontend team on the Nextcloud instance. I will post there a link to this forum entry, maybe someone has more overview on how things should be handled