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With the New Folder option turned on for a document library that has document sets enabled, the New Folder option is only available on the library itself, not within a Document Set. When viewing in Windows Explorer a new folder can be created within a Document Set.

Does anyone know of a way to enable the New Folder option on the ribbon within Document Sets?

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up vote 2 down vote accepted

It looks like folders aren't offically supported by Microsoft within Document Sets. See the Document Sets planning (SharePoint Server 2010)

From the document:

Folders are not allowed in document sets, and metadata navigation cannot be used in a Document Set

There may be an unsupported way, but it will likely cause problems.

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Thanks for finding that. –  John Chapman Dec 6 '11 at 1:58
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