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I think all folders need to be set up to hold the objects of TERM and have type:term set up in all entries parameter.A folder can have as many subfolders as you want but in a folder you will only see the direct child objects/terms that are contained in that folder, not subfolders.If this does not fix the issue, could you share the export of your attempts? Using the ... top right corner on Glossary should do the trick.
Also please share with me the printscreens of subfolders settings to email@example.com