Ok, I think I get what’s going on. The main key insight that could make sense of it for you is that the Timeline view only shows each timeline item as one single activity type, even if inside that item there’s segments of different types. So for example if a timeline item has a mix of car and walking segments within it, the timeline view will show either walking or car depending on which type took up more of the duration.
What you’ll want to do is go into the Individual Segments view of the item and tap on the car segments and then choose “car” from the list again. This will split those segments out into separate timeline items, showing them separately on the timeline view.
That bit of UI is unfortunately completely unintuitive. I improved on it in Arc Mini, by putting in an explicit button for “Promote to timeline”, and I really should do the same in Arc too. But yeah, changing the type of a segment will always split that segment out into a separate timeline item, even if you “changed” it to the type it already was.
From there the processing engine might decide to merge the segments back together. For example if there were segments walking → cycling → walking, and you correct the cycling segment to walking, it will first be split out into a separate timeline item, then the processing engine will say “that’s walking → walking → walking, so I can merge those all together into a single walking item”. But if instead you split that cycling out to car, or even cycling again, the processing engine might say “ok, that’s walking → car → walking, so I shouldn’t merge those back together”.