We've tried to reproduce what you are describing and have not been able to do so.
For example, I updated our Breadcrumb "Population" QuickStart because it uses an XML data source like you mentioned. I set the AutoMinimizeItemCount to 1 and added a button that, when clicked, will set the SelectedPath in code. I tried setting SelectedPath to "Root" and "Root\\Folder 2". In both scenarios, the path was properly set and the drop-down for all breadcrumb items was visible with the correct items displayed.
Can you tell us how to reproduce what you are describing in one of our samples? Otherwise, could you create a simple project to demonstrate the issue and send to our support address, removing any bin/obj folders from the ZIP to avoid it getting SPAM-blocked?
We are working to finalize the next WPF release ASAP and, if this is a product issue, we'd like to get this taken care of for the release. If you can provide something quickly that'd be great.
As for setting the expanded container via code, are you asking about populating the drop-down list of items? If so, those are derived from the data source and I'm not aware of any straight-forward method to set those in code.