Yeah we noticed this recently as well. Basically Illustrator has several ways to organize things, either by grouping or by sublayers. It can get pretty complicated differentiating between the two, and some of the templates aren't set up as well as they could be. We'll fix this for future versions, sorry for the confusion (it still confuses me too).
Thanks for the follow up. I just found "Okay Samurai Puppets" which has lots more examples. Wilk I like particularly. I was trying to work out how to use the new masks feature, but think for my case I actually want to use eye lids instead.
Okay, so it turned out I wanted masks AND eye lids. In case anyone else stumbles across this thread, what I did was I created a new (not visible) "Right Pupil Range" object that is bigger than the Right Eyeball, so the pupil knows how far it can go (a bit beyond the eyeball boundary). I then made sure Right Pupil appears before Right Eyeball in the same layer group, and then in the Puppet I manually selected the Right Pupil then "Puppet/Create Clipping Mask" from the menu. The pupil is then clipped by the eyeball. It is also behind any eye lid movements (already in Wilk). But this was not enough - I also duplicated the eyeball then made the white part transparent (so I just had the black eyeball outline) and moved that above the pupil and eyeball. (It might have been better to separate the black outline from the whites of the eyeball, but this was quick and easy.) Without this, the blue pupil would be in front of the black eyeball outline.
End result is larger pupils feel more natural because they can be hidden behind eye lids and the rest of the face.