fix: address folder tree QA feedback — recursive filtering, folder creation, path display, remove flatten banner

1. Folder selection now recursively includes notes from subfolders
2. + button creates a new folder with inline rename (Tauri command + UI)
3. Note list items show full path when note is in a subdirectory
4. Remove flat vault migration banner and all related code (Rust commands,
   hook, component, smoke test) — subfolders are now first-class

Co-Authored-By: Claude Opus 4.6 (1M context) <noreply@anthropic.com>

src-tauri/src/commands/vault.rs

@@ -89,15 +89,15 @@ pub fn migrate_is_a_to_type(vault_path: String) -> Result<usize, String> {
 }
 
 #[tauri::command]
-pub fn flatten_vault(vault_path: String) -> Result<usize, String> {
+pub fn create_vault_folder(vault_path: String, folder_name: String) -> Result<String, String> {
     let vault_path = expand_tilde(&vault_path);
-    vault::flatten_vault(&vault_path)
-}
-
-#[tauri::command]
-pub fn vault_health_check(vault_path: String) -> Result<vault::VaultHealthReport, String> {
-    let vault_path = expand_tilde(&vault_path);
-    vault::vault_health_check(&vault_path)
+    let folder_path = std::path::Path::new(vault_path.as_ref()).join(&folder_name);
+    if folder_path.exists() {
+        return Err(format!("Folder '{}' already exists", folder_name));
+    }
+    std::fs::create_dir_all(&folder_path)
+        .map_err(|e| format!("Failed to create folder: {}", e))?;
+    Ok(folder_name)
 }
 
 #[tauri::command]
@@ -227,7 +227,6 @@ pub async fn search_vault(
 pub fn repair_vault(vault_path: String) -> Result<String, String> {
     let vault_path = expand_tilde(&vault_path);
     vault::migrate_is_a_to_type(&vault_path)?;
-    vault::flatten_vault(&vault_path)?;
     vault::repair_config_files(&vault_path)?;
     git::ensure_gitignore(&vault_path)?;
     Ok("Vault repaired".to_string())
@@ -362,7 +361,7 @@ mod tests {
     }
 
     #[test]
-    fn test_repair_vault_flattens_type_folders() {
+    fn test_repair_vault_migrates_is_a_to_type() {
         let dir = tempfile::TempDir::new().unwrap();
         let vault_path = dir.path();
         let note_dir = vault_path.join("note");
@@ -371,9 +370,8 @@ mod tests {
 
         let result = repair_vault(vault_path.to_str().unwrap().to_string());
         assert!(result.is_ok());
-        assert!(vault_path.join("hello.md").exists());
-        assert!(!note_dir.join("hello.md").exists());
-        let content = std::fs::read_to_string(vault_path.join("hello.md")).unwrap();
+        assert!(note_dir.join("hello.md").exists());
+        let content = std::fs::read_to_string(note_dir.join("hello.md")).unwrap();
         assert!(content.contains("type: Note"));
         assert!(!content.contains("is_a:"));
     }

src-tauri/src/lib.rs

@@ -155,8 +155,7 @@ pub fn run() {
             commands::batch_delete_notes,
             commands::empty_trash,
             commands::migrate_is_a_to_type,
-            commands::flatten_vault,
-            commands::vault_health_check,
+            commands::create_vault_folder,
             commands::batch_archive_notes,
             commands::batch_trash_notes,
             commands::get_settings,

src-tauri/src/vault/migration.rs

@@ -1,6 +1,3 @@
-use regex::Regex;
-use serde::Serialize;
-use std::collections::HashSet;
 use std::fs;
 use std::path::Path;
 use walkdir::WalkDir;
@@ -118,311 +115,6 @@ pub fn migrate_is_a_to_type(vault_path: &str) -> Result<usize, String> {
     Ok(migrated)
 }
 
-/// Folders that are NOT flattened — they contain assets, not notes.
-const KEEP_FOLDERS: &[&str] = &["attachments", "assets"];
-
-/// Determine a unique filename at `dest_dir`, appending -2, -3, etc. on collision.
-fn unique_filename(dest_dir: &Path, filename: &str, taken: &HashSet<String>) -> String {
-    if !dest_dir.join(filename).exists() && !taken.contains(filename) {
-        return filename.to_string();
-    }
-    let stem = Path::new(filename)
-        .file_stem()
-        .map(|s| s.to_string_lossy().to_string())
-        .unwrap_or_default();
-    let ext = Path::new(filename)
-        .extension()
-        .map(|s| format!(".{}", s.to_string_lossy()))
-        .unwrap_or_default();
-    let mut counter = 2;
-    loop {
-        let candidate = format!("{}-{}{}", stem, counter, ext);
-        if !dest_dir.join(&candidate).exists() && !taken.contains(&candidate) {
-            return candidate;
-        }
-        counter += 1;
-    }
-}
-
-/// Flatten vault structure: move all notes from type-based subfolders to the vault root.
-/// Skips `type/`, `config/`, `attachments/`, and `_themes/` folders.
-/// Updates path-based wikilinks to title-based after moving.
-/// Returns the number of files moved.
-pub fn flatten_vault(vault_path: &str) -> Result<usize, String> {
-    let vault = Path::new(vault_path);
-    if !vault.exists() || !vault.is_dir() {
-        return Err(format!(
-            "Vault path does not exist or is not a directory: {}",
-            vault_path
-        ));
-    }
-
-    // Collect all .md files in subfolders (not already at root, not in KEEP_FOLDERS)
-    let mut to_move: Vec<(std::path::PathBuf, String)> = Vec::new();
-    for entry in WalkDir::new(vault)
-        .follow_links(true)
-        .into_iter()
-        .filter_map(|e| e.ok())
-    {
-        let path = entry.path();
-        if !path.is_file() || path.extension().map(|ext| ext != "md").unwrap_or(true) {
-            continue;
-        }
-        // Skip files already at vault root
-        if path.parent() == Some(vault) {
-            continue;
-        }
-        // Check if this file is inside a KEEP_FOLDER
-        let rel = path.strip_prefix(vault).unwrap_or(path);
-        let top_folder = rel
-            .components()
-            .next()
-            .map(|c| c.as_os_str().to_string_lossy().to_string())
-            .unwrap_or_default();
-        if KEEP_FOLDERS.iter().any(|&k| k == top_folder) {
-            continue;
-        }
-        // Hidden folders (e.g. .laputa, .git)
-        if top_folder.starts_with('.') {
-            continue;
-        }
-
-        let filename = path
-            .file_name()
-            .map(|f| f.to_string_lossy().to_string())
-            .unwrap_or_default();
-        to_move.push((path.to_path_buf(), filename));
-    }
-
-    if to_move.is_empty() {
-        return Ok(0);
-    }
-
-    // Build a map of old path → (new filename, old relative stem) for wikilink updates
-    let mut taken: HashSet<String> = HashSet::new();
-    // Pre-populate with files already at root
-    if let Ok(entries) = fs::read_dir(vault) {
-        for e in entries.flatten() {
-            if e.path().is_file() {
-                if let Some(name) = e.file_name().to_str() {
-                    taken.insert(name.to_string());
-                }
-            }
-        }
-    }
-
-    let vault_prefix = format!("{}/", vault.to_string_lossy());
-    let mut moves: Vec<(std::path::PathBuf, std::path::PathBuf, String)> = Vec::new(); // (old, new, old_rel_stem)
-    for (old_path, filename) in &to_move {
-        let new_name = unique_filename(vault, filename, &taken);
-        taken.insert(new_name.clone());
-        let new_path = vault.join(&new_name);
-        let old_rel = old_path
-            .to_string_lossy()
-            .strip_prefix(&vault_prefix)
-            .unwrap_or(&old_path.to_string_lossy())
-            .strip_suffix(".md")
-            .unwrap_or(&old_path.to_string_lossy())
-            .to_string();
-        moves.push((old_path.clone(), new_path, old_rel));
-    }
-
-    // Move all files
-    let mut moved = 0;
-    for (old, new, _) in &moves {
-        match fs::rename(old, new) {
-            Ok(()) => moved += 1,
-            Err(e) => log::warn!(
-                "Failed to move {} → {}: {}",
-                old.display(),
-                new.display(),
-                e
-            ),
-        }
-    }
-
-    // Update path-based wikilinks across the vault.
-    // Replace [[folder/slug]] with [[slug]] (title-based).
-    // Build a single regex matching any old path stem.
-    let path_stems: Vec<&str> = moves.iter().map(|(_, _, stem)| stem.as_str()).collect();
-    if !path_stems.is_empty() {
-        let escaped: Vec<String> = path_stems.iter().map(|s| regex::escape(s)).collect();
-        let pattern_str = format!(r"\[\[({})\]\]", escaped.join("|"));
-        if let Ok(re) = Regex::new(&pattern_str) {
-            // Collect all .md files in vault (now at root + keep folders)
-            let all_md: Vec<std::path::PathBuf> = WalkDir::new(vault)
-                .follow_links(true)
-                .into_iter()
-                .filter_map(|e| e.ok())
-                .filter(|e| {
-                    e.path().is_file() && e.path().extension().is_some_and(|ext| ext == "md")
-                })
-                .map(|e| e.into_path())
-                .collect();
-
-            for md_path in &all_md {
-                let content = match fs::read_to_string(md_path) {
-                    Ok(c) => c,
-                    Err(_) => continue,
-                };
-                if !re.is_match(&content) {
-                    continue;
-                }
-                let replaced = re.replace_all(&content, |caps: &regex::Captures| {
-                    let matched = caps.get(1).map(|m| m.as_str()).unwrap_or("");
-                    // Extract just the filename stem (last segment)
-                    let slug = matched.rsplit('/').next().unwrap_or(matched);
-                    format!("[[{}]]", slug)
-                });
-                if replaced != content {
-                    let _ = fs::write(md_path, replaced.as_ref());
-                }
-            }
-        }
-    }
-
-    // Clean up empty directories (only type-folder directories, not KEEP_FOLDERS)
-    for (old, _, _) in &moves {
-        if let Some(parent) = old.parent() {
-            if parent != vault {
-                let _ = fs::remove_dir(parent); // only succeeds if empty
-            }
-        }
-    }
-
-    Ok(moved)
-}
-
-/// Result of a vault health check.
-#[derive(Debug, Serialize, Default)]
-pub struct VaultHealthReport {
-    /// Files in non-protected subfolders (won't be scanned by scan_vault).
-    pub stray_files: Vec<String>,
-    /// Files whose filename doesn't match slugify(title).
-    pub title_mismatches: Vec<TitleMismatch>,
-}
-
-/// A single filename-title mismatch.
-#[derive(Debug, Serialize)]
-pub struct TitleMismatch {
-    pub path: String,
-    pub filename: String,
-    pub title: String,
-    pub expected_filename: String,
-}
-
-/// Slugify a title to produce the expected filename stem.
-fn slugify(text: &str) -> String {
-    let result: String = text
-        .to_lowercase()
-        .chars()
-        .map(|c| if c.is_ascii_alphanumeric() { c } else { '-' })
-        .collect();
-    let trimmed = result.trim_matches('-').to_string();
-    // Collapse consecutive dashes
-    let mut prev_dash = false;
-    let collapsed: String = trimmed
-        .chars()
-        .filter(|&c| {
-            if c == '-' {
-                if prev_dash {
-                    return false;
-                }
-                prev_dash = true;
-            } else {
-                prev_dash = false;
-            }
-            true
-        })
-        .collect();
-    if collapsed.is_empty() {
-        "untitled".to_string()
-    } else {
-        collapsed
-    }
-}
-
-/// Check vault health: detect stray files and filename-title mismatches.
-pub fn vault_health_check(vault_path: &str) -> Result<VaultHealthReport, String> {
-    let vault = Path::new(vault_path);
-    if !vault.exists() || !vault.is_dir() {
-        return Err(format!(
-            "Vault path does not exist or is not a directory: {}",
-            vault_path
-        ));
-    }
-
-    let mut report = VaultHealthReport::default();
-
-    // 1. Detect stray files in non-protected subfolders
-    for entry in WalkDir::new(vault)
-        .follow_links(true)
-        .into_iter()
-        .filter_map(|e| e.ok())
-    {
-        let path = entry.path();
-        if !path.is_file() || path.extension().map(|ext| ext != "md").unwrap_or(true) {
-            continue;
-        }
-        // Skip root files (they're fine)
-        if path.parent() == Some(vault) {
-            continue;
-        }
-        let rel = path.strip_prefix(vault).unwrap_or(path);
-        let top_folder = rel
-            .components()
-            .next()
-            .map(|c| c.as_os_str().to_string_lossy().to_string())
-            .unwrap_or_default();
-        if KEEP_FOLDERS.iter().any(|&k| k == top_folder) || top_folder.starts_with('.') {
-            continue;
-        }
-        report.stray_files.push(rel.to_string_lossy().to_string());
-    }
-
-    // 2. Detect filename-title mismatches (root .md files only)
-    if let Ok(dir_entries) = fs::read_dir(vault) {
-        let matter = gray_matter::Matter::<gray_matter::engine::YAML>::new();
-        for dir_entry in dir_entries.flatten() {
-            let path = dir_entry.path();
-            if !path.is_file() || path.extension().map(|ext| ext != "md").unwrap_or(true) {
-                continue;
-            }
-            let filename = path
-                .file_name()
-                .map(|f| f.to_string_lossy().to_string())
-                .unwrap_or_default();
-            let content = match fs::read_to_string(&path) {
-                Ok(c) => c,
-                Err(_) => continue,
-            };
-            let parsed = matter.parse(&content);
-            let fm_title = parsed.data.as_ref().and_then(|pod| {
-                if let gray_matter::Pod::Hash(ref map) = pod {
-                    if let Some(gray_matter::Pod::String(s)) = map.get("title") {
-                        return Some(s.as_str());
-                    }
-                }
-                None
-            });
-            let title = super::parsing::extract_title(fm_title, &content, &filename);
-            let expected_stem = slugify(&title);
-            let expected_filename = format!("{}.md", expected_stem);
-            let current_stem = filename.strip_suffix(".md").unwrap_or(&filename);
-            if current_stem != expected_stem {
-                report.title_mismatches.push(TitleMismatch {
-                    path: path.to_string_lossy().to_string(),
-                    filename: filename.clone(),
-                    title,
-                    expected_filename,
-                });
-            }
-        }
-    }
-
-    Ok(report)
-}
-
 #[cfg(test)]
 mod tests {
     use super::*;
@@ -561,226 +253,4 @@ mod tests {
         let count = migrate_is_a_to_type(tmp.path().to_str().unwrap()).unwrap();
         assert_eq!(count, 0, "non-markdown files should be ignored");
     }
-
-    // --- flatten_vault ---
-
-    fn write_nested_file(
-        dir: &std::path::Path,
-        rel_path: &str,
-        content: &str,
-    ) -> std::path::PathBuf {
-        let path = dir.join(rel_path);
-        if let Some(parent) = path.parent() {
-            fs::create_dir_all(parent).unwrap();
-        }
-        fs::write(&path, content).unwrap();
-        path
-    }
-
-    #[test]
-    fn test_flatten_vault_moves_notes_to_root() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_nested_file(vault, "note/hello.md", "---\ntype: Note\n---\n# Hello\n");
-        write_nested_file(
-            vault,
-            "project/my-proj.md",
-            "---\ntype: Project\n---\n# My Proj\n",
-        );
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 2);
-        assert!(vault.join("hello.md").exists());
-        assert!(vault.join("my-proj.md").exists());
-        assert!(!vault.join("note/hello.md").exists());
-        assert!(!vault.join("project/my-proj.md").exists());
-    }
-
-    #[test]
-    fn test_flatten_vault_skips_protected_folders() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_nested_file(vault, "attachments/image.md", "# Image note\n");
-        write_nested_file(vault, "note/hello.md", "---\ntype: Note\n---\n# Hello\n");
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 1);
-        assert!(vault.join("hello.md").exists());
-        assert!(vault.join("attachments/image.md").exists());
-    }
-
-    #[test]
-    fn test_flatten_vault_handles_filename_collision() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "hello.md", "---\ntype: Note\n---\n# Root Hello\n");
-        write_nested_file(
-            vault,
-            "note/hello.md",
-            "---\ntype: Note\n---\n# Note Hello\n",
-        );
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 1);
-        assert!(vault.join("hello.md").exists());
-        assert!(vault.join("hello-2.md").exists());
-        // Root file unchanged
-        let root_content = fs::read_to_string(vault.join("hello.md")).unwrap();
-        assert!(root_content.contains("Root Hello"));
-        // Moved file gets suffixed name
-        let moved_content = fs::read_to_string(vault.join("hello-2.md")).unwrap();
-        assert!(moved_content.contains("Note Hello"));
-    }
-
-    #[test]
-    fn test_flatten_vault_updates_path_wikilinks() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_nested_file(
-            vault,
-            "note/hello.md",
-            "---\ntype: Note\n---\n# Hello\n\nSee [[project/my-proj]] for details.\n",
-        );
-        write_nested_file(
-            vault,
-            "project/my-proj.md",
-            "---\ntype: Project\n---\n# My Proj\n",
-        );
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 2);
-        let content = fs::read_to_string(vault.join("hello.md")).unwrap();
-        assert!(content.contains("[[my-proj]]"));
-        assert!(!content.contains("[[project/my-proj]]"));
-    }
-
-    #[test]
-    fn test_flatten_vault_noop_when_already_flat() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "hello.md", "---\ntype: Note\n---\n# Hello\n");
-        write_file(vault, "world.md", "---\ntype: Note\n---\n# World\n");
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 0);
-    }
-
-    #[test]
-    fn test_flatten_vault_nested_subfolders() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_nested_file(vault, "note/sub/deep.md", "---\ntype: Note\n---\n# Deep\n");
-
-        let count = flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert_eq!(count, 1);
-        assert!(vault.join("deep.md").exists());
-    }
-
-    #[test]
-    fn test_flatten_vault_cleans_empty_directories() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_nested_file(vault, "note/hello.md", "---\ntype: Note\n---\n# Hello\n");
-
-        flatten_vault(vault.to_str().unwrap()).unwrap();
-        assert!(
-            !vault.join("note").exists(),
-            "empty folder should be removed"
-        );
-    }
-
-    // --- slugify ---
-
-    #[test]
-    fn test_slugify_basic() {
-        assert_eq!(slugify("Hello World"), "hello-world");
-    }
-
-    #[test]
-    fn test_slugify_special_chars() {
-        assert_eq!(slugify("My Note (v2)!"), "my-note-v2");
-        assert_eq!(slugify("Sprint Retrospective"), "sprint-retrospective");
-    }
-
-    #[test]
-    fn test_slugify_empty() {
-        assert_eq!(slugify(""), "untitled");
-    }
-
-    #[test]
-    fn test_slugify_unicode() {
-        assert_eq!(slugify("Café Résumé"), "caf-r-sum");
-    }
-
-    // --- vault_health_check ---
-
-    #[test]
-    fn test_health_check_detects_stray_files() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "root-note.md", "---\ntype: Note\n---\n# Root Note\n");
-        write_file(vault, "project.md", "---\ntype: Type\n---\n# Project\n");
-        write_nested_file(
-            vault,
-            "old-folder/stray.md",
-            "---\ntype: Note\n---\n# Stray\n",
-        );
-
-        let report = vault_health_check(vault.to_str().unwrap()).unwrap();
-        assert_eq!(report.stray_files.len(), 1);
-        assert!(report.stray_files[0].contains("stray.md"));
-    }
-
-    #[test]
-    fn test_health_check_no_stray_when_flat() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "my-note.md", "# My Note\n");
-        write_file(vault, "project.md", "---\ntype: Type\n---\n# Project\n");
-
-        let report = vault_health_check(vault.to_str().unwrap()).unwrap();
-        assert!(report.stray_files.is_empty());
-    }
-
-    #[test]
-    fn test_health_check_detects_title_mismatch() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        // Filename is "wrong-name.md" but title frontmatter says "My Actual Title"
-        write_file(
-            vault,
-            "wrong-name.md",
-            "---\ntitle: My Actual Title\ntype: Note\n---\n# My Actual Title\n",
-        );
-
-        let report = vault_health_check(vault.to_str().unwrap()).unwrap();
-        assert_eq!(report.title_mismatches.len(), 1);
-        assert_eq!(report.title_mismatches[0].filename, "wrong-name.md");
-        assert_eq!(
-            report.title_mismatches[0].expected_filename,
-            "my-actual-title.md"
-        );
-    }
-
-    #[test]
-    fn test_health_check_no_mismatch_when_correct() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "my-note.md", "---\ntype: Note\n---\n# My Note\n");
-
-        let report = vault_health_check(vault.to_str().unwrap()).unwrap();
-        assert!(report.title_mismatches.is_empty());
-    }
-
-    #[test]
-    fn test_health_check_skips_hidden_folders() {
-        let tmp = tempdir().unwrap();
-        let vault = tmp.path();
-        write_file(vault, "root.md", "# Root\n");
-        write_nested_file(vault, ".git/config.md", "# Git Config\n");
-        write_nested_file(vault, ".laputa/cache.md", "# Cache\n");
-
-        let report = vault_health_check(vault.to_str().unwrap()).unwrap();
-        assert!(report.stray_files.is_empty());
-    }
 }

src-tauri/src/vault/mod.rs

@@ -17,7 +17,7 @@ pub use entry::{FolderNode, VaultEntry};
 pub use file::{get_note_content, save_note_content};
 pub use getting_started::{create_getting_started_vault, default_vault_path, vault_exists};
 pub use image::{copy_image_to_vault, save_image};
-pub use migration::{flatten_vault, migrate_is_a_to_type, vault_health_check, VaultHealthReport};
+pub use migration::migrate_is_a_to_type;
 pub use rename::{
     detect_renames, rename_note, update_wikilinks_for_renames, DetectedRename, RenameResult,
 };

src/App.tsx

@@ -47,8 +47,6 @@ import { useVaultBridge } from './hooks/useVaultBridge'
 import { ConflictResolverModal } from './components/ConflictResolverModal'
 import { ConfirmDeleteDialog } from './components/ConfirmDeleteDialog'
 import { UpdateBanner } from './components/UpdateBanner'
-import { FlatVaultMigrationBanner } from './components/FlatVaultMigrationBanner'
-import { useFlatVaultMigration } from './hooks/useFlatVaultMigration'
 import { invoke } from '@tauri-apps/api/core'
 import { isTauri, mockInvoke } from './mock-tauri'
 import type { SidebarSelection, InboxPeriod } from './types'
@@ -119,7 +117,6 @@ function App() {
   useVaultConfig(resolvedPath)
   const { settings, loaded: settingsLoaded, saveSettings } = useSettings()
   useTelemetry(settings, settingsLoaded)
-  const flatVaultMigration = useFlatVaultMigration(resolvedPath, vault.entries.length > 0, vault.reloadVault)
   const { mcpStatus, installMcp } = useMcpStatus(resolvedPath, setToastMessage)
 
   const autoSync = useAutoSync({
@@ -275,6 +272,20 @@ function App() {
     window.dispatchEvent(new CustomEvent('laputa:open-icon-picker'))
   }, [])
 
+  const handleCreateFolder = useCallback(async (name: string) => {
+    try {
+      if (isTauri()) {
+        await invoke('create_vault_folder', { vaultPath: resolvedPath, folderName: name })
+      } else {
+        await mockInvoke('create_vault_folder', { vaultPath: resolvedPath, folderName: name })
+      }
+      await vault.reloadVault()
+      setToastMessage(`Created folder "${name}"`)
+    } catch (e) {
+      setToastMessage(`Failed to create folder: ${e}`)
+    }
+  }, [resolvedPath, vault, setToastMessage])
+
   const handleRemoveNoteIconCommand = useCallback(() => {
     if (notes.activeTabPath) handleRemoveNoteIcon(notes.activeTabPath)
   }, [notes.activeTabPath, handleRemoveNoteIcon])
@@ -477,7 +488,7 @@ function App() {
         {sidebarVisible && (
           <>
             <div className="app__sidebar" style={{ width: layout.sidebarWidth }}>
-              <Sidebar entries={vault.entries} folders={vault.folders} selection={selection} onSelect={handleSetSelection} onSelectNote={notes.handleSelectNote} onCreateType={notes.handleCreateNoteImmediate} onCreateNewType={dialogs.openCreateType} onCustomizeType={entryActions.handleCustomizeType} onUpdateTypeTemplate={entryActions.handleUpdateTypeTemplate} onReorderSections={entryActions.handleReorderSections} onRenameSection={entryActions.handleRenameSection} onToggleTypeVisibility={entryActions.handleToggleTypeVisibility} inboxCount={inboxCount} />
+              <Sidebar entries={vault.entries} folders={vault.folders} selection={selection} onSelect={handleSetSelection} onSelectNote={notes.handleSelectNote} onCreateType={notes.handleCreateNoteImmediate} onCreateNewType={dialogs.openCreateType} onCustomizeType={entryActions.handleCustomizeType} onUpdateTypeTemplate={entryActions.handleUpdateTypeTemplate} onReorderSections={entryActions.handleReorderSections} onRenameSection={entryActions.handleRenameSection} onToggleTypeVisibility={entryActions.handleToggleTypeVisibility} onCreateFolder={handleCreateFolder} inboxCount={inboxCount} />
             </div>
             <ResizeHandle onResize={layout.handleSidebarResize} />
           </>
@@ -547,17 +558,6 @@ function App() {
           />
         </div>
       </div>
-      {flatVaultMigration.needsMigration && (
-        <FlatVaultMigrationBanner
-          strayFileCount={flatVaultMigration.strayFiles.length}
-          isMigrating={flatVaultMigration.isMigrating}
-          onMigrate={async () => {
-            const count = await flatVaultMigration.migrate()
-            setToastMessage(`Migrated ${count} file${count !== 1 ? 's' : ''} to vault root`)
-          }}
-          onDismiss={flatVaultMigration.dismiss}
-        />
-      )}
       <UpdateBanner status={updateStatus} actions={updateActions} />
       <RenameDetectedBanner renames={detectedRenames} onUpdate={handleUpdateWikilinks} onDismiss={handleDismissRenames} />
       <StatusBar noteCount={vault.entries.length} modifiedCount={vault.modifiedFiles.length} vaultPath={vaultSwitcher.vaultPath} vaults={vaultSwitcher.allVaults} onSwitchVault={vaultSwitcher.switchVault} onOpenSettings={dialogs.openSettings} onOpenLocalFolder={vaultSwitcher.handleOpenLocalFolder} onConnectGitHub={dialogs.openGitHubVault} onClickPending={() => handleSetSelection({ kind: 'filter', filter: 'changes' })} onClickPulse={() => handleSetSelection({ kind: 'filter', filter: 'pulse' })} onCommitPush={commitFlow.openCommitDialog} isGitVault={!vault.modifiedFilesError} hasGitHub={!!settings.github_token} syncStatus={autoSync.syncStatus} lastSyncTime={autoSync.lastSyncTime} conflictCount={autoSync.conflictFiles.length} lastCommitInfo={autoSync.lastCommitInfo} remoteStatus={autoSync.remoteStatus} onTriggerSync={autoSync.triggerSync} onPullAndPush={autoSync.pullAndPush} onOpenConflictResolver={conflictFlow.handleOpenConflictResolver} zoomLevel={zoom.zoomLevel} onZoomReset={zoom.zoomReset} buildNumber={buildNumber} onCheckForUpdates={handleCheckForUpdates} onRemoveVault={vaultSwitcher.removeVault} mcpStatus={mcpStatus} onInstallMcp={installMcp} />

src/components/FlatVaultMigrationBanner.tsx

@@ -1,37 +0,0 @@
-interface FlatVaultMigrationBannerProps {
-  strayFileCount: number
-  isMigrating: boolean
-  onMigrate: () => void
-  onDismiss: () => void
-}
-
-/**
- * Banner shown when the vault has files in non-protected subfolders.
- * Offers to flatten them to the vault root.
- */
-export function FlatVaultMigrationBanner({ strayFileCount, isMigrating, onMigrate, onDismiss }: FlatVaultMigrationBannerProps) {
-  return (
-    <div className="flex items-center gap-3 px-4 py-2 bg-amber-50 dark:bg-amber-950 border-b border-amber-200 dark:border-amber-800 text-sm" data-testid="migration-banner">
-      <span className="flex-1 text-amber-800 dark:text-amber-200">
-        {strayFileCount} note{strayFileCount !== 1 ? 's' : ''} found in subfolders.
-        Flatten to vault root for consistent scanning.
-      </span>
-      <button
-        className="px-3 py-1 text-xs font-medium rounded bg-amber-600 text-white hover:bg-amber-700 disabled:opacity-50"
-        onClick={onMigrate}
-        disabled={isMigrating}
-        data-testid="migration-flatten-btn"
-      >
-        {isMigrating ? 'Migrating...' : 'Flatten Now'}
-      </button>
-      <button
-        className="px-2 py-1 text-xs text-amber-600 dark:text-amber-400 hover:underline"
-        onClick={onDismiss}
-        disabled={isMigrating}
-        data-testid="migration-dismiss-btn"
-      >
-        Dismiss
-      </button>
-    </div>
-  )
-}

src/components/FolderTree.tsx

@@ -1,4 +1,4 @@
-import { useState, useCallback, memo } from 'react'
+import { useState, useCallback, useRef, useEffect, memo } from 'react'
 import { Folder, FolderOpen, CaretDown, CaretRight, Plus } from '@phosphor-icons/react'
 import type { FolderNode, SidebarSelection } from '../types'
 import { cn } from '@/lib/utils'
@@ -7,6 +7,7 @@ interface FolderTreeProps {
   folders: FolderNode[]
   selection: SidebarSelection
   onSelect: (selection: SidebarSelection) => void
+  onCreateFolder?: (name: string) => void
 }
 
 function FolderItem({
@@ -71,15 +72,31 @@ function FolderItem({
   )
 }
 
-export const FolderTree = memo(function FolderTree({ folders, selection, onSelect }: FolderTreeProps) {
+export const FolderTree = memo(function FolderTree({ folders, selection, onSelect, onCreateFolder }: FolderTreeProps) {
   const [sectionCollapsed, setSectionCollapsed] = useState(false)
   const [expanded, setExpanded] = useState<Record<string, boolean>>({})
+  const [isCreating, setIsCreating] = useState(false)
+  const [newFolderName, setNewFolderName] = useState('')
+  const inputRef = useRef<HTMLInputElement>(null)
 
   const toggleFolder = useCallback((path: string) => {
     setExpanded((prev) => ({ ...prev, [path]: !prev[path] }))
   }, [])
 
-  if (folders.length === 0) return null
+  useEffect(() => {
+    if (isCreating) inputRef.current?.focus()
+  }, [isCreating])
+
+  const handleCreateFolder = () => {
+    const name = newFolderName.trim()
+    if (name && onCreateFolder) {
+      onCreateFolder(name)
+    }
+    setIsCreating(false)
+    setNewFolderName('')
+  }
+
+  if (folders.length === 0 && !isCreating) return null
 
   return (
     <div style={{ padding: '8px 0' }}>
@@ -93,7 +110,14 @@ export const FolderTree = memo(function FolderTree({ folders, selection, onSelec
           {sectionCollapsed ? <CaretRight size={12} /> : <CaretDown size={12} />}
           <span className="text-[10px] font-semibold" style={{ letterSpacing: 0.5 }}>FOLDERS</span>
         </div>
-        <Plus size={12} className="text-muted-foreground" />
+        {onCreateFolder && (
+          <Plus
+            size={12}
+            className="text-muted-foreground hover:text-foreground"
+            onClick={(e) => { e.stopPropagation(); setIsCreating(true); setSectionCollapsed(false) }}
+            data-testid="create-folder-btn"
+          />
+        )}
       </button>
 
       {/* Tree */}
@@ -110,6 +134,24 @@ export const FolderTree = memo(function FolderTree({ folders, selection, onSelec
               onSelect={onSelect}
             />
           ))}
+          {isCreating && (
+            <div className="flex items-center gap-2" style={{ padding: '4px 8px' }}>
+              <Folder size={18} className="shrink-0 text-muted-foreground" />
+              <input
+                ref={inputRef}
+                className="flex-1 border border-border rounded bg-background px-1.5 py-0.5 text-[13px] text-foreground outline-none focus:border-primary"
+                value={newFolderName}
+                onChange={(e) => setNewFolderName(e.target.value)}
+                onKeyDown={(e) => {
+                  if (e.key === 'Enter') handleCreateFolder()
+                  if (e.key === 'Escape') { setIsCreating(false); setNewFolderName('') }
+                }}
+                onBlur={handleCreateFolder}
+                placeholder="Folder name"
+                data-testid="new-folder-input"
+              />
+            </div>
+          )}
         </div>
       )}
     </div>

src/components/NoteItem.tsx

@@ -129,6 +129,9 @@ export function NoteItem({ entry, isSelected, isMultiSelected = false, isHighlig
           {entry.title}
           <StateBadge archived={entry.archived} trashed={entry.trashed} />
         </div>
+        {entry.path.includes('/') && (
+          <div className="truncate text-[10px] text-muted-foreground" data-testid="note-path">{entry.path}</div>
+        )}
       </div>
       {entry.snippet && (
         <div className="mt-0.5 text-[12px] leading-[1.5] text-muted-foreground" data-testid="note-snippet" style={{ display: '-webkit-box', WebkitLineClamp: 2, WebkitBoxOrient: 'vertical', overflow: 'hidden' }}>

src/components/Sidebar.tsx

@@ -35,6 +35,7 @@ interface SidebarProps {
   onRenameSection?: (typeName: string, label: string) => void
   onToggleTypeVisibility?: (typeName: string) => void
   folders?: FolderNode[]
+  onCreateFolder?: (name: string) => void
   inboxCount?: number
   onCollapse?: () => void
 }
@@ -207,7 +208,7 @@ export const Sidebar = memo(function Sidebar({
   entries, selection, onSelect, onSelectNote, onCreateType, onCreateNewType,
   onCustomizeType, onUpdateTypeTemplate, onReorderSections, onRenameSection,
   onToggleTypeVisibility,
-  folders = [], inboxCount = 0, onCollapse,
+  folders = [], onCreateFolder, inboxCount = 0, onCollapse,
 }: SidebarProps) {
   const [collapsed, setCollapsed] = useState<Record<string, boolean>>({})
   const [customizeTarget, setCustomizeTarget] = useState<string | null>(null)
@@ -317,7 +318,7 @@ export const Sidebar = memo(function Sidebar({
         </DndContext>
 
         {/* Folder tree */}
-        <FolderTree folders={folders} selection={selection} onSelect={onSelect} />
+        <FolderTree folders={folders} selection={selection} onSelect={onSelect} onCreateFolder={onCreateFolder} />
       </nav>
 
       <ContextMenuOverlay pos={contextMenuPos} type={contextMenuType} innerRef={contextMenuRef} onOpenCustomize={(type) => { closeContextMenu(); setCustomizeTarget(type) }} onStartRename={handleStartRename} />

src/hooks/useFlatVaultMigration.ts

@@ -1,71 +0,0 @@
-import { useState, useEffect, useCallback } from 'react'
-import { invoke } from '@tauri-apps/api/core'
-import { isTauri } from '../mock-tauri'
-
-interface HealthReport {
-  stray_files: string[]
-  title_mismatches: { path: string; filename: string; title: string; expected_filename: string }[]
-}
-
-interface FlatVaultMigration {
-  /** True if stray files were detected in non-protected subfolders. */
-  needsMigration: boolean
-  /** List of stray file paths (relative to vault root). */
-  strayFiles: string[]
-  /** Dismiss the migration prompt without migrating. */
-  dismiss: () => void
-  /** Run flatten_vault and reload. Returns the count of files moved. */
-  migrate: () => Promise<number>
-  /** True while migration is running. */
-  isMigrating: boolean
-}
-
-/**
- * Detects if the vault has files in non-protected subfolders and offers
- * to flatten them to the vault root. Runs once on vault load.
- */
-export function useFlatVaultMigration(
-  vaultPath: string,
-  entriesLoaded: boolean,
-  reloadVault: () => Promise<unknown>,
-): FlatVaultMigration {
-  const [strayFiles, setStrayFiles] = useState<string[]>([])
-  const [dismissed, setDismissed] = useState(false)
-  const [isMigrating, setIsMigrating] = useState(false)
-
-  useEffect(() => {
-    if (!entriesLoaded || !vaultPath || !isTauri()) return
-    let cancelled = false
-    invoke<HealthReport>('vault_health_check', { vaultPath })
-      .then((report) => {
-        if (!cancelled && report.stray_files.length > 0) {
-          setStrayFiles(report.stray_files)
-        }
-      })
-      .catch(() => { /* non-critical */ })
-    return () => { cancelled = true }
-  }, [vaultPath, entriesLoaded])
-
-  const dismiss = useCallback(() => setDismissed(true), [])
-
-  const migrate = useCallback(async () => {
-    setIsMigrating(true)
-    try {
-      const count = await invoke<number>('flatten_vault', { vaultPath })
-      setStrayFiles([])
-      setDismissed(true)
-      await reloadVault()
-      return count
-    } finally {
-      setIsMigrating(false)
-    }
-  }, [vaultPath, reloadVault])
-
-  return {
-    needsMigration: strayFiles.length > 0 && !dismissed,
-    strayFiles,
-    dismiss,
-    migrate,
-    isMigrating,
-  }
-}

src/utils/noteListHelpers.test.ts

@@ -715,7 +715,12 @@ describe('filterEntries — folder selection', () => {
     expect(result.find(e => e.title === 'Site')).toBeUndefined()
   })
 
-  it('filters by parent folder (non-recursive — direct children only)', () => {
+  it('filters recursively — includes notes from subfolders', () => {
+    const result = filterEntries(entries, { kind: 'folder', path: 'projects' })
+    expect(result.map(e => e.title)).toEqual(['Note 1', 'Note 2', 'Site'])
+  })
+
+  it('filters direct children', () => {
     const result = filterEntries(entries, { kind: 'folder', path: 'areas' })
     expect(result.map(e => e.title)).toEqual(['Health'])
   })

src/utils/noteListHelpers.ts

@@ -314,12 +314,8 @@ function applySubFilter(entries: VaultEntry[], subFilter: NoteListFilter): Vault
 }
 
 function isInFolder(entryPath: string, folderRelPath: string): boolean {
-  const sep = '/'
-  const suffix = sep + folderRelPath + sep
-  const dirEnd = entryPath.lastIndexOf(sep)
-  if (dirEnd < 0) return false
-  const entryDir = entryPath.slice(0, dirEnd + 1)
-  return entryDir.endsWith(suffix)
+  const needle = '/' + folderRelPath + '/'
+  return entryPath.includes(needle) || entryPath.startsWith(folderRelPath + '/')
 }
 
 function filterByKind(entries: VaultEntry[], selection: SidebarSelection, subFilter?: NoteListFilter): VaultEntry[] {

tests/smoke/flatten-vault-structure.spec.ts

@@ -1,48 +0,0 @@
-import { test, expect } from '@playwright/test'
-
-test.describe('Flat vault structure', () => {
-  test.beforeEach(async ({ page }) => {
-    await page.goto('/')
-    await page.waitForLoadState('networkidle')
-  })
-
-  test('new note is created at vault root (no type folder in path)', async ({ page }) => {
-    // Create a new note via Ctrl+N (mock Cmd+N)
-    await page.locator('body').click()
-    await page.keyboard.press('Control+n')
-
-    // Wait for the editor to appear (note was created)
-    await page.waitForTimeout(500)
-
-    // Check that no toast says "Note moved" — type change should not move file
-    const movedToast = page.locator('text=Note moved')
-    await expect(movedToast).not.toBeVisible()
-  })
-
-  test('changing type via frontmatter does NOT show move toast', async ({ page }) => {
-    // Create a note first
-    await page.locator('body').click()
-    await page.keyboard.press('Control+n')
-    await page.waitForTimeout(500)
-
-    // Verify no "Note moved" toast appears (since move_note_to_type_folder is removed)
-    const movedToast = page.locator('text=Note moved')
-    await expect(movedToast).not.toBeVisible()
-  })
-
-  test('app loads without errors', async ({ page }) => {
-    // Verify the app loaded — check that the main container exists
-    const main = page.locator('#root')
-    await expect(main).toBeVisible()
-
-    // No console errors about move_note_to_type_folder
-    const errors: string[] = []
-    page.on('console', msg => {
-      if (msg.type() === 'error') errors.push(msg.text())
-    })
-    await page.waitForTimeout(1000)
-
-    const moveErrors = errors.filter(e => e.includes('move_note_to_type_folder'))
-    expect(moveErrors).toHaveLength(0)
-  })
-})