Nested install writes htaccess to root instead of install base

Greetings,

I’ve run into an issue that I don’t know if is by design or is a bug. I currently have 2 WP installs:

-Main site:
WordPress Address (URL): example.com/cms
Site Address (URL): example.com

-Beta site:
WordPress Address (URL): example.com/cms-beta/cms
Site Address (URL): example.com/cms-beta

For each I followed the instructions in the Codex regarding giving WP its own directory.

The problem that I am running into is that when I update the permalinks for the Beta site it is writing to the htaccess file located at example.com as opposed to writing the htaccess file located at example.com/cms-beta which is what I would expect it to do. The consequence of this is that the Main site gets taken over by the Beta site.

I tried moving the Beta site a level deeper to:
WordPress Address (URL): example.com/cms-beta/wpbeta/cms
Site Address (URL): example.com/cms-beta/wpbeta

But again the Beta install is writing to the htaccess file all the way in the root (at example.com) and not to example.com/cms-beta/wpbeta.

Am I misunderstanding how this is all supposed to work? I thought that it should just use the Site Address variable to determine where it writes the htaccess file to, but that doesn’t seem to be the case.

Any help that anyone can offer would be greatly appreciated!

Thanks!
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