The custom list app allows you to export project names along with additional information regarding those projects. For type 'Project' the Custom List app does not follow your current project and scoping in your project finder. The custom list exports all project names that you have access to. This is done so that you can retrieve all projects even if they are in different hierarchies.
If you wish to export a specific project hierarchy names, you can use the query field in the Custom List app setting to accomplish this. With type set to 'Project'. Enter a query such as:
((Name = "First Project") OR (Parent.Name = "First Project") OR (Parent.Parent.Name = "First Project"))
If your top level project is called 'First Project' and you have 2 child levels of child projects (3 total levels), this query will restrict your results to the 'First Project' hierarchy.
Please Note that the maximum hierarchy is 10 levels, so if you have additional levels that you wish to traverse, you can add additional syntax to pull those levels of projects as well.