...

This is a different approach from the traditional way of organizing Tests in flat lists by using Test Sets, which was the only available method before Xray v3.0.

Users coming from legacy Test Management tools may find this way approach more natural and more intuitive. Other organizations may prefer to not enable this feature at all and choose the Test Set approach instead.

Thus, a general setting enables users to globaly globally opt-in or opt-out of this hierarchical way of organizing Tests.

...

In a given parent folder, it is not allowed to have folders with similar names. For this, Xray does a case-insentive check insensitive check of the trimmed folder name whenever you create or rename folder in order to evaluate if a similar folder already exists within its parent. This means that these folder names would all be considered to be the same: "  phanTom", "phantom", "PHANTOM". Please note that it is not allowed to use the "/" character in the folder name.

Recommendations

• Think well how to structure the hierarchy of folders, having in mind that a Test may only be in a single folder; how would you organize them in your laptop if you were dealing with documents? Start by identifying the  the folders that you want to put place at the root and then try to drill-down on them, by creating sub-folders that are relevant to you
• If you're already using Test Sets, don't try to replicate the Test Sets model in the Test Repository because, most probably, it won't work. Have in mind that a Test can only be part of a Test Repository's folder, while with Test Sets a Test may belong to several Test Sets  
• Avoid putting semantic related with the execution phase in the Test Repository or else your Test Repository will end messed up; Use the proper entities, such as Test Plans (and respective Boards) to make planning/execution related organization 

...