Hi Tom,
It looks like the created on date is being ignored as the second level criteria in that sorting using the toggle swtich, I am helping to take a look further into that. In the meantime, I would create two separate collections, just duplicate the collection list:
In first list, delete the sorts and add a filter, too show only articles with the featured flag on:
In the second collection list, do not use a filter, and remove the toggle switch from the sort:
Then using the two lists the expected content should show.
I hope this helps, when I have more info on the sorting behavior with toggle/created on combination, I will provide an update.
Thanks in advance.