really does seem such a shame, when an app works SO well, that it falls down on such a basic thing! i really feel like it has tried to be a little bit too clever here! my only fools and horses folders are a mixture. Some of the folders are in the format episode 1, episode 2, etc. and so they work with the VS system, but then a lot of the older ones have names in them, and so they seem to appear as if they are films 'Diamonds are for Heather (1982)', etc.
I would think most people have their folders organized how they would like to see them on any device and VS should allow you to support this.