Javascript - Updatepanel Inside Hidden Panel Possible Bug

The javascript generated by the asp.net SciptManager control seems to have a bug and cant handle hidden UpdatePanels. A javascript error is thrown when a control within one updated panel tries to make another update panel visible. Is this a bug with ASP.Net ajax? And does anyone have any ideas how to get around this? heres is an example of what im trying to do

<script type="text/C#" runat="server">
protected void LinkButton1_Click(object sender, EventArgs e)
{
Panel1.Visible = true;
}
</script>
<asp:ScriptManager ID="ScriptManager1" runat="server">
</asp:ScriptManager>
<asp:UpdatePanel ID="UpdatePanel1" runat="server">
<ContentTemplate>
<asp:LinkButton ID="LinkButton1" runat="server" OnClick="LinkButton1_Click" Text="Show Panel"></asp:LinkButton>
</ContentTemplate>
</asp:UpdatePanel>
<asp:Panel ID="Panel1" runat="server" Visible="false">
<asp:UpdatePanel ID="UpdatePanel2" runat="server">
<ContentTemplate>
</ContentTemplate>
</asp:UpdatePanel>
</asp:Panel>

this is the javascript error that gets thrown when clicking on the "LinkButton1" link. This error comes from the javascript that is generated by the asp.net ScriptManager control

Error: Sys.InvalidOperationException: Could not find UpdatePanel with ID 'ctl00_ContentPlaceHolder1_UpdatePanel2'