look at this
the yellow table shows the wp_list_categories list.
Bold text are the arguments I run and the rest is the result.
(here is a copy of the function)
$sec_level_arg = array( 'style' => 'none', 'orderby' => 'name', 'order' => 'ASC', 'hide_empty' => '0', 'depth' => '2', 'taxonomy' => 'taxonomy', 'echo' => '0', ); echo wp_list_categories($sec_level_arg);
If you look at the output closer you realize that it isn't sorted by name. Here is the part of the output
Všetaty u Mělníka
as you can see it isn't alphabetical in any way.
It seams to me that this problem occurs only when I go deeper then
'depth' => '1',
The depth one seams to be OK, but 2, 3 are mixed in this weird way.
Plus, might be that the problem show up only for taxonomies(I have no proof if it does same thing for categories as well), but that's only my guess. If that's the truth then there is something wrong in WP core.