It looks like moving to the selected entry of the grandparent of a !PopupFolder after opening the !PopupFolder will close all popups above the !PopupFolder's immediate parent. (The selected entry being the one that opens the !PopupFolder's immediate parent.)

using popup2-2.1.7:

root->system->my computer
move back to root->system

root->litestep->utilities
then move the mouse back to root->litestep