Why do you have to set that? Thunderbird automatically searches and subscribes to the Inbox IMAP folder when you add an IMAP account. You don't need to specify this via the Advanced server settings section.What makes you think you need to set it up like that? Is Thunderbird not fetching emails from the IMAP Inbox folder automatically?

If I don't set that - all my emails end up under INBOX e.g. If I have a folder called "Holiday" without that set it shows:

myemail@domain.com

    inbox
        holiday

with it set it shows

myemail@domain.com

   inbox
   holiday

And the latter is what I would like to see (and it alwasy did that....)

The only service I'm aware of that involves this setting is gmail, where setting it to [Gmail] changes the folder listing.

Not sure I understand your suggestion? Can you elaborate? I've been using this for many years for my provider (Rackspace)

I don't see that option in the Rackspace setup instructions, although it looks like a feature with Apple Mail. Also, I can't say why the setting isn't saved in TB 78. I do notice the same thing: the setting is not remembered when Account Settings is closed. There is a long-standing meta bug.

I would not regard it as an option in Rackspace - rather an annoyance. I moved to them many years ago and this was what I had to do to get my folders to work correctly. I was able to configure it on any version of Thunderbird except 78.

I'm in a situation now where I have one Mac that is OK (the old one, where I upgraded to 78) and one which I installed 78 from scratch where it doesn't work.

Is there a way to edit or copy a file which moves the correct configuration from the old mac to the new one?

Configure it in v68 then load that profile in v78.

Happy to but how do I do that / which files should I copy (I can just copy them from my old mac 78 but not sure what to copy)

You can copy your profile folder from the old mac and paste its contents into the new mac's profile folder. Make sure you quit Thunderbird before doing any of that. See Profiles - Where Thunderbird stores your messages and other user data for details and Moving Thunderbird Data to a New Computer for how to do it.

Also, I can't say why the setting isn't saved in TB 78. I do notice the same thing: the setting is not remembered when Account Settings is closed.

Definitely a bug. I managed to get it saved using the Config Editor. The value is a string named mail.server.server#.server_sub_directory where # is the server number assigned to the account. To determine the server number, i searched in Config Editor for the account name (email address). In my case, the Gmail account that I was using for testing this was named server4, so the value name I used was

mail.server.server4.server_sub_directory

and its string data was

[Gmail]

@Stans Just looking at your suggested solution (using text editor) - I can't find the file which contains: mail.server.server - can you point me in the right direction (on a Mac)

Config Editor is a feature of Thunderbird (and Firefox). It is an advanced configuration utility that can be used to change Tbird's preferences, and a powerful/dangerous one too, so it should not be played with. Details about how to use it are available here Config Editor. In Tbird v78, there is no Advanced section under the Preferences tab as stated in that article. The Config Editor button is found at the bottom end of the General section of the Preferences tab.

Thanks @Stans - I went the other way and installed 68.10.0 on my new mac, configured it, and upgraded it. That did the trick. Thanks all for your help.