The entry in Favorites originally had no sub-folders. The PM ingest created the first sub-folder, which is what is not showing up in Favorites. Since the Favorites folder has no sub-folders, I can 't close it and reopen it.
As an experiment, I deleted the Favorites folder and re-created it. I then added a second sub-folder to it, closed and reopened it in favorites and the second sub-folder showed up. It appears that a first-sub-folder is required to be able to see subsequent sub-folders. This looks either like a bug or needs to be explained in the manual.