The bookmark manager doesn't seem to allow folders within folder, but the bookmark menu (in the "O" menu) does allow folders within folders. Now, if only I could get that menu into a more easily accessible place.
Also, on the new bookmarks menu, I don't like that it (a) doesn't automatically alphabetize (so each folder must be right clicked and alphabetized individually), and (b) clicking or right clicking or middle clicking makes the menu disappear. The requested action gets completed, but then the menu goes away. So, for example, I can middle click to open a bookmark in a new tab (Yay! This wasn't possible in O12), but then the menu disappears. I have to open the menu again to open another bookmark. This also made alphabetizing all my folders a very tedious task. It would make more sense to keep the menu open for middle click and right click actions. It should close on a left click action, though.