They need to be fixed as part of the toy's transformation. But yeah, Demolishor really is a rather disappointing toy. Really should've been a Deluxe. Oh well. Rampage I can forgive because his treads breakapart in the transformation to form the whip weapons.

IMO the best Transformer toy with working caterpillar treads is Beast Wars Rampage. That's gotta be one of the sweetest feats of Transformers engineering - simple yet so amazingly awesomesauce! I love how the treads can roll in tank mode, but in robot and crab mode you can't see any trace of them at all!