It should; this is a regression against gmenu-simple-editor
It seems pyxdg interprets the menu renaming and the <layout> element slightly different than gnome-menus. Replacing <Layout> <Menuname>Preferences</Menuname> <Menuname>Administration</Menuname> </Layout> by <Layout> <Menuname>Preferences</Menuname> <Menuname>Administration</Menuname> <Menuname>System Settings</Menuname> </Layout> makes the Administration submenu appear in alacarte.
Fixed in redhat-menus-6.7.6-1.fc6