Things get a bit dicey when using child tracks. You may have to add the mask effect to track 1 in order for it to work properly with a child track. Alternatively, try making 2 NOT a child track as the multiply mask of track 1 should work on 2 even if it's not a child.

I'm just guessing here, don't have enough time at the moment to experiment. I'll try checking it out later. If you want t email your .vf file (just the .vf, don't need any media) to me then i can try some experiments with your exact setup and see what i find.