Parent mail folders created prior to R5.0.5 must be upgraded to take advantage of new folder functionality. To do this, navigate to the particular folder, click Folder in the Action Bar, and select Upgrade Design.
However, nested folders require specific steps for upgrades. Users can move the documents in a nested folder to a parent folder using the All Documents view, or use the Notes client to move the folder to the parent level before upgrading the folder design.