Thanks for reporting this bug. However, I think it is invalid because
the "Apply permissions to enclosed files" button is not meant to apply
the directory's permissions to the enclosed files, it is meant to apply
the permissions specified in the "File access" drop-down boxes to the
enclosed files. In this context, the "Apply permissions to enclosed
files" does work as expected. See the attached screenshot to see what I
mean.

** Attachment added: "Screenshot-pages Properties.png"
   http://launchpadlibrarian.net/37879780/Screenshot-pages%20Properties.png

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gksudo nautilus won't set ownership/permissions on files below
https://bugs.launchpad.net/bugs/165113
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