diff --git a/.gitmodules b/.gitmodules
index 4897e31..737b0aa 100644
--- a/.gitmodules
+++ b/.gitmodules
@@ -1,4 +1,4 @@
 [submodule "Flagsmith.EngineTest/EngineTestData"]
 	path = Flagsmith.EngineTest/EngineTestData
 	url = git@github.com:Flagsmith/engine-test-data.git
-	branch = v3.5.0
+	branch = v3.7.0
diff --git a/Flagsmith.Engine/Engine.cs b/Flagsmith.Engine/Engine.cs
index 4cabe8d..f2567bb 100644
--- a/Flagsmith.Engine/Engine.cs
+++ b/Flagsmith.Engine/Engine.cs
@@ -168,7 +168,29 @@ private static bool ContextMatchesRule<_, __>(EvaluationContext<_, __> context,
                         break;
                 }
 
-            return matchesConditions && (rule.Rules?.All(r => ContextMatchesRule(context, r, segmentKey)) ?? true);
+            if (!matchesConditions)
+                return false;
+
+            if (rule.Rules is null || !rule.Rules.Any())
+                return true;
+
+            bool matchesSubRules;
+            switch (rule.Type)
+            {
+                case TypeEnum.All:
+                    matchesSubRules = rule.Rules.All(r => ContextMatchesRule(context, r, segmentKey));
+                    break;
+                case TypeEnum.Any:
+                    matchesSubRules = rule.Rules.Any(r => ContextMatchesRule(context, r, segmentKey));
+                    break;
+                case TypeEnum.None:
+                    matchesSubRules = !rule.Rules.Any(r => ContextMatchesRule(context, r, segmentKey));
+                    break;
+                default:
+                    matchesSubRules = false;
+                    break;
+            }
+            return matchesSubRules;
         }
 
         private static bool ContextMatchesCondition<_, __>(EvaluationContext<_, __> context, Condition condition, string segmentKey)
diff --git a/Flagsmith.EngineTest/EngineTestData b/Flagsmith.EngineTest/EngineTestData
index 7840a13..4b29dc7 160000
--- a/Flagsmith.EngineTest/EngineTestData
+++ b/Flagsmith.EngineTest/EngineTestData
@@ -1 +1 @@
-Subproject commit 7840a1349b601df3b6b4a089f40864f659801afb
+Subproject commit 4b29dc772a764364af2dd504ecefbdf74cf5473f