Short answer: yes you can have subfolders under Local Folders.

How are you putting your old email into Local Folders? If you do this within Thunderbird, there is right-click menu that allows you to create a new folder or subfolder. Then you can move messages into that new folder or subfolder by drag and drop, or right-click|Move to...

You cannot just add material by copying it into Local Folders in your file manager. Thunderbird uses files to represent material presented as if stored in folders and you need to preserve or replicate that structure if adding files by hand. So, with care, you can add a Thunderbird-style mbox file into the Local Folders account, but if you're importing data from another email client it is unlikely to be in such a format.

Thanks. Good to know, but I chose instead to uninstall Thunderbird and install Alpine. My years of messages had been saved using Pine (predecessor to Alpine) so that alleviates any 'different email client' problem. But in fact Alpine is different, I think, from proprietary email clients, possibly including Thunderbird, that convert messages into something specific to the client, or as a Google person said to me "Messages aren't files." Which means that they are sometimes _worse_ than files. With Alpine, any client's incoming messages can be read and, when saved without non-text attachments, are in ascii. I find that very useful. Also compact. Thanks again!