For example, I have created a 'branch' of my favourites that contains development folders, so I would like to use an icon like this as the icon for that branch instead of the defauslt folder icon.
Directory Opus gets folder icons from a Windows api. Change the default folder icon in Opus
See here. Create your own Folder Icon Change toolbar [UPDATED: 2.0]
I do it via desktop.ini files pointing to custom icons, then they show up all over the place, including favourites. That's just the way I've always done it.
There isn't currently a way to change the icon used for the branches themselves; only for the folders within them.
Are there any plans to change that?