Hide in raid logic has not changed since it was originally added.
When on, the code constantly hides or shows the watch list based on if in a raid, which does override anything else.
I just changed it to only apply the hide/show when your "in raid" status changes.
These will be in next version:
Changed "Hide when in a raid group" to only do the hide/show when your "in raid" status changes.
Added alt left click of Carbonite minimap button to toggle the Watch List visibility.