I was expecting the folders to be filtered for "reports" as configured but they are not.
Should they be?
Files are filtered as expected but not folders.
Not the end of the world I know I can change Flat View to exclude folders all together which is good enough.
Just wondering..... 
Preferences / Miscellaneous / Advanced: [Behavior] flatview_folder_filters
Make sure you read the manual's description of what it does before turning it on, so you understand what you're getting yourself into.
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Thank you Leo