IF the switch is a COMMAND and not an INDICATOR, then why when you unset the switch to issue the command to set all files to not read-only does it NOT remove the RO flag from ALL files and folders.
Clearing the box and clicking Apply or OK, and then OK again, does clear the read-only (R) attribute for ALL files within the folder and all subfolders.
Also, checking the box and clicking Apply or OK, and then OK again, does set the read-only (R) attribute for ALL files within the folder and all subfolders.
How are you coming to the conclusion that it does not do that? If you are looking under the Security tab, then you are checking the wrong place. It only changes a file attribute, so that's what you need to check. Here's an example:
If you clear the checkbox and click Apply or OK like this:

You should get a prompt like this:

After clicking OK, all files within that folder tree should have their read-only (R) attribute cleared. If you are not getting that result, then there's something unusual going on. Please show screenshots of your results if that's the case.
Here are screenshots of the lowest subfolder in a folder tree where I set and then unset the read-only (R) attribute at the top level of the tree. I enabled display of the Attributes property in Explorer to see the result. The attribute was changed for ALL files in the tree as expected:
Read-only set:

Read-only cleared:

SO, since every folder has that box checked automagically, every time we review the properties on a folder, and maybe accidently hit "apply" on the way out, we have made the contained files and folders RO?
It's NOT checked. It's a SOLID BLOCK. That's not the same. It is never checked, or unchecked, when you open the Properties dialog.
For most dialogs we would interpret a solid block to mean "one or more". However, in this case, it means absolutely nothing because Explorer does NOT scan the files for the read-only attribute when you open the Properties dialog. There could be zero, some, or all files with their read-only attribute set. As I've stated many times, it's a very poor interface choice on Microsoft's part, but it's been this way for decades and they have no motivation to change it.
If you hit "Apply" or "OK" on the "way out", it will do absolutely nothing because you have neither checked or unchecked that box. And if you did, you would get a confirmation dialog. Why would you make such a claim without testing?
The problem then is that the File Explorer has a SEVERE LEVEL 1 BUG that needs to be FIXED.
There is nothing broken in regards to this feature. It's a terrible interface design, but it works correctly and has worked the same way for decades.
But please understand that if you are encountering some issue such as Office telling you that a file is opened "read-only", or you're getting an "access denied" message, or some other problem like that, I'm NOT dismissing your issue. I'm just letting you know that you're wasting your time looking at this particular non-issue. You have not found the smoking gun.