Cannot remove folder from Sub-collections

Ok, I'm still confused about Collections. Similar topic from 2015:

I have created a sub-collection, and I assume "the folders below the folder are turned into sub-sub-collections etc.". The problem is, that I do get the option to "Remove from Collection" (in the Delete menu only) but it doesn't do anything when applied to a sub-folder. It only works for files, and for the parent/root folder.

It seems I cannot do what I described in the final post of that thread i.e.

  1. Create a collection
  2. Add a folder to it as "Sub-Collections" (as opposed to "Members")
  3. Remove specific sub-folders from the collection. I mean the "virtual"/collection sub-folders only, not the actual folders and files they point to.