The "hide channels" function is not working.

Never heard that one before (seriously). 

Unplug all of the STBs, restart the modem (RG), then plug all the STBs in again and see if that helps.

go back to menu or just channel up/down and all the unwanted channels are still here

Channel up/down apparently follows the Guide, not the Favorites.  Funny I never tried that before because I don't use up/down, that, or it was another effect of last years UI update.  Or maybe I don't use up/down because it's always been that useless way.  I always just go use the Favorites grid (push the yellow triangular "A" button or "A" button with a yellow triangle on it depending on which remote you have).

I don't understand your "go back to menu" part for the channel navigation.

I think the OP meant to say he returns to the Guide (not Menu) and the channels are still there. 

This is a real head scratcher.

Oh, ok   Then, yes, Guide should omit and up/down should skip the hidden channels.  I don't think I've seen that kind of problem reported before. 

OK, Thanks.  I'll give it a try.

I have reset individual receivers, but not all at once and the Gateway.

Did you click on the save button or just exited.  You have to click the save button to save your choices.

I'm having the same problem and it is driving me crazy!  Did you ever find a solution?