Apparently, outlining doesn't work as expected when $region is used.

Trying to unfold a nested outlining area (e.g. the WORKING-STORAGE SECTION in the sample image down below) using the context menu Outlining > Toogle Outlining Expansion  CTRL M, CTRL M doesn't unfold the corresponding area. Instead, the outermost area ("$region main program" in this case) is toggled.

Or, put in other words: you cannot unfold WORKING-STORAGE SECTION by placing the cursor on that line and hitting CTRL M, CTRL M because the WORKING-STORAGE SECTION is nested in the $region main program area.