I have now confirmed that this is “standard” behaviour for linux based systems.
A summary of the whole topic can be found at https://ourcodeworld.com/articles/read/160/watch-files-and-directories-with-electron-framework
As/when people start developing plugins (which will in many cases create new Notes) this will become a significant issue for linux users if not improved.
I would appreciate a statement of intent from the devs on this because if it’s going to be “won’t fix” then I will have to start converting my workflow to use a flat structure. Thanks Nigel.