Thank you for the feedback. We are planning to build the ability to create folders in Outlook.com on your mobile browser. For the time being please use Outlook.com on your desktop’s web browser to manage your folders.Camillo Beretta commented
Outlook.com targets mainly a business audience, we all have a large and ever expanding number of folders. Why on earth should outlook.com expand ALL folders and subfolders by default? IT makes navigating our folder structure borderline impossible.
I like Outlook.com but this is becoming a deal breaker.