I figured it out today. When you want to create a new folder under your INBOX, and not just at the same level, (if you are trying to do this, you will understand what I mean), here's what you do:
1) Select the inbox you want to create the folder in.
2) click on the + button under your folder list on the left.
3) When a window pops up asking what to call the folder, type INBOX/NewFolderName
Thats it, nothing will happen for a few seconds, and then voila NewFolderName will appear under your INBOX.
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