Look with an ordinary form, even if it has cascade lookup elements, every record is displayed correctly as you move from one record to the next (I think, anyway, I haven't done a thorough check, but I'd darn well hope so).
But with datasheet view, with a cascade lookup the master combo box focus in the cascade is allowed to affect the rest of the cascade fields FOR ALL RECORDS. Why? This does not happen in ordinary form view.
It affects all records because all records share the exact same control which has be reproduced multiple times.
In an ordinary form (Single Form View) the cascading combo Row Source is configured for that single visible record. Each time you move to another record the On Current Event reconfigures the Row Source.
Any other record with a value that is not part of that particular Row Source would be showing an Error just as it does in the datasheet or Continuous Forms View. It just doesn't matter because those other records are not being displayed.