The adopted boy is excluded (and any non-Birth child) in the sub-filter Descendants of <person> sharing yDNA, but added as the child of the father (main filter). But because he is excluded from the DNA filter, his line is not extended.
Seeing how the outcome was to be of Family, the use of the rule could have problems and return less than expected results.
Adoptions are relatively infrequent so you can always manually add/remove them and their descendants with an extra filter depending on what your goal is.
I realized something from writing a response to Matt’s discussion on the ‘Shared Y-DNA’ rule.
The ‘parents’, variant would include 2 persons outside the spec: the parents of the progenitor. To correct for that, I should have layered in an exclusion rule for the parents of the progenitor.