To hide currently unimportant folders and focus one specific folder for current work
This could be done in the same way Visual Studio does it:
when right clicking a folder, an option “Scope to this” appears.
If this selection is clicked, that folder is set as the root in the Files menu, showing only its content and hiding all other folders and files of the Vault.
A button to switch to another folder or back to the vault root should be added on top.
Here’s a gif how this could look like:
I don’t think there’s an actual workaround.
If you have a lot of nested folders, but only need to work with files that are inside a level 4 deep folder for example, it costs a lot of width just to see everything inside it.