Mail app imap folders broken on Big Sur

Hello,

I'm using Mail app on Catalina and Last week I got a new mac mini m1 and noticed that Mail app has been updated. I've got some issues with IMAP folder mapping. And its different on Catalina and BigSur for some reason.

On catalina:

Mailboxes

Inbox

my-Email-Inbox1

my-Email-Inbox2

my-Email-Inbox3

Flagged

Sent

Junk

Bin

Archive

my-Email-Inbox1

Folder1

SubFolder..

Folder2

my-Email-Inbox2

Folder1

SubFolder..

Folder2

On Big Sur

All Inboxes

my-Email-Inbox1

my-Email-Inbox2

my-Email-Inbox3

Flagged

All Sent

All Junk

All Bin

All Archive

my-Email-Inbox1

Inbox

Drafts

Sent

Junk

Bin

Archive

Folder1

SubFolder..

Folder2

...

First issue - why my Folders can't be displayed under Inboxes/All Mailboxes on both systems. That is something that freaks me out. Is there a way to display subfolders under Inboxes? To use subfolders I need to go to each account folder down the menu tree.

Second issue- why Big Sur displays all folders including Inbox, Drafts.... under On My Mac section? On Catalina I can see my custom folders only which is not perfect but way better.

If not possible to fix both issues on Big Sur, is there a better email client which would support my requirements?

Cheers

Prem