ArcGIS Server follows the Continuous Inheritance Model to store and compute authorization permissions for GIS services security. In this model, a child resource (folder or service) inherits the permissions from its parent resource (folder or service). The permissions on the child can be changed to differ from the parent. Changing the permissions on the parent with respect to a particular role (principal) restores inheritance. It changes the permissions of all children recursively with respect to the role and brings the permissions into alignment with the parent.
When changing the permission on a parent resource with respect to a role, a check is made to determine if there are child resources (at any level of recursion) whose permissions for that role differ from the permissions on the parent prior to making the change. If any descendent resource differs in the permission from the parent, a warning is issued.