Hi tsteward,
I attached a (not perfectly) fixed version of your folder chooser.

Now there are two buttons, one to create a new folder on the same level of the current selected folder, one to create a new subfolder of the current selected folder.
Why not perfectly fixed? The new folder or subfolder in not inserted in sort order but always at the and of the current folder list.
Hope this solution is working for you...
specci48