I believe it does that only if the new folder has the same name as folders in other accounts. Maybe I am misunderstanding what you are experiencing.

No, these are all unique folder names. These are organizational folders I create to sort out my Inbox. Way back, this was never an issue but has been for the last year or two.

Puzzling. Would you mind posting a screenshot of unified folders and also one of that specific account under 'All Folders' ? That may give people here on the forum a better grasp. Please note which are the unique folders. Thank you.

Here you go. Any of the subfolders (some marked with yellow arrows) are automatically added to the unified In Box when they are initially created. It didn't used to work like that. They used to be left out of the Unified Folders area by default.

Thanks.

You've got all your subfolders under the Inbox. At least, that's what it looks like to me. Which is supported by imap, but is rather non-standard. Did you do that, or did your server do that?

Unified folders wasn't designed to support that paradigm.