Compact vertical menu navigation ux

I have a compact vertical menu that's app-drawer style. It works really well since I only need the menu for basic navigation but need it small otherwise, but it has a navigation visualization issue.

My navigation is setup like:

Top Menu Item 1
     Sub-menu item 1
     Sub-menu item 2
Top Menu Item 2
     Sub-menu item 1

and so on. All are dynamically named and assorted. Therefore a user has to select a initial option before the other items can be shown. But once a user selects a top-menu item they rarely navigate to another item. Currently I have it setup where the first item is 'top' level selector and then after that the items appear below.

Collapsed

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Top Expanded

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Secondary Expanded

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Another option top level selected

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Note here the DEM changed to PRIV to represent the secondary options for the Privacy Incident and Policy Management space.

So, do you think this is a good way to illustrate the navigation? Do you think users will get lost in the initial selection? Do you have a better concept?

Additional thoughts: I thought about having the top level items be the first set of items on the space and then hovering would show the secondary items but because once a user selects a top level its rare that they change and then thats just more clicks to get to the action they want to perform.

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