We have seen this and it makes total sense. Currently, regular Folders inside Smart Folders can only appear under a specific Entity, not under all Entities of a Smart Folder. This limits what you can build with Smart Folders, so we will address that.
Although not directly related, it would be great if you also had the ability to control if nested views and documents for entities are visible in the Smart Folder structure. I’ve been adding documents to some entities but find users get confused by seeing them in the Smart Folder structure, especially if the Smart Folder has a nested hierarchy. It would also be great to control which types of views are visible (ie be able to set filters on entity views)