I have Exchange 2016 with public folders in a public folder mailbox (ie: NOT legacy public folders) and I am trying to take the permissions from a parent folder and propagate them to all the child folders. I need all the child folder permissions removed and just inherit the ones from the parent. The "Apply changes to this public folder and all its subfolders." does not seem to do anything to the pre-existing permissions on the child folders.
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I wouldn't expect it to.
You will need to run a command to remove the permissions - all the other commands do is add the permissions.
The command you need is remove-publicfolderclientpermission and is documented here: https://technet.microsoft.com/en-us/library/bb124573(v=exchg.160).aspx

Sembee
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So there is no way to, like NTFS permissions, tell a sub-folder to just inherit its permissions from the parent. There are a lot of sub-folders with a lot of users. I will need to run a lot of separate remove-publicfolderclientpermission commands at this rate. – Caynadian Feb 10 '17 at 17:39
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Only at point of creation. So if you create a folder, then set permissions on the folder, then create sub folders - the sub folders inherit the permissions. – Sembee Feb 11 '17 at 15:42