Great question.
For designs with one component, the root is the entire component: sketches, bodies, analysis, construction, etc. with necessarily no joints or subcomponents.
Since Fusion allows each file to be either a single component (minimally perhaps just one sketch, one body, no child components), or an assembly (multiple components), or BOTH (!), there are some rules that allow this flexibility, but require a little diligence. Yours was a "BOTH" case and the Arm Bracket is a good example of top-down design.
In Top Down designs, it's possible that all sketches and bodies start at the root and later get pushed into Components. This is totally fine for a single design that will not be inserted into other designs. And actually, most of the time there is no problem at all with re-use/insertion. In your case, we found a UI problem, but the program was functioning as designed. The next update has improvements to this area.
Generally, the best practice for top-down designs that are going to be assemblies:
1. Use New Component (RMB top root node)
2. Activate the new sub-component.
3. All sketches and bodies will go into the sub-component that is active.
4. Activate the root to add things to the root - like inserting more parts.
Here are some pictures.

Use the radio button to activate components.

Another benefit of this style:

Phil Eichmiller
Software Engineer
Quality Assurance
Autodesk, Inc.