Here is what FCPx help says.
You can break apart a compound clip or a standard clip to convert its contents to individual clips in the Timeline.
Select a compound clip or a standard clip in the Timeline, and choose Clip > Break Apart Clip Items (or press Shift-Command-G).Final Cut Pro replaces the clip selected in the Timeline with the individual items that made up the clip.
If you selected a compound clip, its contents revert back to the original clips that made up the compound clip. However, the parent compound clip remains in the Browser.
Note that the contents revert to the original clips. What you are seeing is the way it works.