The sorting commands in the contextual menu are a quick and dirty feature for one-off use.  I believe, as you say, that they do not respect your Sorting Settings.

The "workaround" would be to use the command in the main menu: Bookmarks > Sort All, which should respect your Sorting Settings.  Of course, as the name imples, this will sort all of the folders in your 10K bookmarks Collection.  So before you do this, you should verify that the Soring Settings are as you desire for your entire Collection.

If you really want to sort only this one folder, you'll need  more complicated workaround.  In the .bmco document window tab Settings > Sorting, top section, set folders to defaualtl to Don't sort, and then, using the contextual menu on your target folder, set it to Will be sorted.