If the term is shared, it will not include the children term. If the term is not shared, it will include the children.
As of WordPress 4.4, terms have been split, adding
'include_children' => true to almost all taxonomy queries. This can have a very significant performance impact on code that was performant previously. In some cases, queries that used to return almost instantly will time out. Therefore, we now recommend adding
'include_children' => false to all taxonomy queries when possible.
In many instances where the wanted behavior is to grab all posts that are either the parent or a child term, this can be replaced by only querying for the parent term and enforcing inside a save_post() hook that if a child term is added then its parent term is also added. A one-time WP-CLI command might be needed to ensure previous data integrity.
Last updated: August 03, 2023