diff --git a/.gitmodules b/.gitmodules
index 5c24c5b..e48e529 100644
--- a/.gitmodules
+++ b/.gitmodules
@@ -1,4 +1,4 @@
 [submodule "tests/engine/engine-tests/engine-test-data"]
 	path = tests/engine/engine-tests/engine-test-data
 	url = git@github.com:Flagsmith/engine-test-data.git
-	branch = v3.5.0
+	branch = v3.7.0
diff --git a/flagsmith-engine/segments/evaluators.ts b/flagsmith-engine/segments/evaluators.ts
index e3bc5ee..82551e8 100644
--- a/flagsmith-engine/segments/evaluators.ts
+++ b/flagsmith-engine/segments/evaluators.ts
@@ -119,9 +119,11 @@ function evaluateSubRules(
 ): boolean {
     if (!rule.rules || rule.rules.length === 0) return true;
 
-    return rule.rules.every((subRule: SegmentRule) =>
+    const subRuleResults = rule.rules.map((subRule: SegmentRule) =>
         traitsMatchSegmentRule(subRule, segmentKey, context)
     );
+
+    return evaluateRuleConditions(rule.type, subRuleResults);
 }
 
 function evaluateRuleConditions(ruleType: string, conditionResults: boolean[]): boolean {
diff --git a/tests/engine/engine-tests/engine-test-data b/tests/engine/engine-tests/engine-test-data
index 7840a13..4b29dc7 160000
--- a/tests/engine/engine-tests/engine-test-data
+++ b/tests/engine/engine-tests/engine-test-data
@@ -1 +1 @@
-Subproject commit 7840a1349b601df3b6b4a089f40864f659801afb
+Subproject commit 4b29dc772a764364af2dd504ecefbdf74cf5473f