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There is no solution about this as of the moment.
I don't think this is also a bug since those values auto filled to the form are already submitted or existing values so they are not cleared when they are conditionally hidden since those values are fetched from the database unless you will manually clear them. As far as I know, the "clear hidden field values" will only work on the form level for the first submission not when you edit the submissions through edit form URL.
Anyway, this case is already on the devs list. I will also include your thread so our developers will update you here once there's an update on this case.
It's strange, some months ago I hard tested the setting "Clear Hidden Field Values = Clear on submit" and I'm sure it worked, also in edit mode, and I built many parts of my code based on this.
Anyway, I think a setting like this must be works also in edit mode, otherwise which sense it has?
Thank you for the additional information. I see that the thread is already forwarded to our backend team for further investigation. Once we have any update in this regard, you'll be posted here.