We’ve made the following change for the next release (no ETA on it yet):
In order to lead to more predictable behavior and allow for repositioning instantiated prefabs, static bodies are no longer un-parented during conversion. For best performance, it is still recommended that static bodies either be root-level entities, or that static shapes be set up as compounds. Dynamic and kinematic bodies are still un-parented.
This means that if you have some non-dynamic body we can ingest it when it is nested in a hierarchy, it is just less optimal for performance.