I've been fighting this battle myself for the last week or so. I read your fix and thought I wonder...so I logged into AOL via the web portal and proceeded to move all the mail from their current folders into newly created folders of the same name. It apparently worked. All my folders are now syncing in outlook except for the inbox. So I created a new folder via the web portal and then created a filter to send all email coming into the aol address to forward to the new folder. Not exactly ideal but I'll take it for now. You are the only person who's post I've seen that worked!! I just wanted to thank you for being such a genius!

Thanks for the kind words, Mimi. I'm hardly a genius here, just persistent following the scientific method. I also posted this issue to the Apple forums, and I would have posted it to AOL forums but they do not exist.

While I appreciate all who try to help, there were those that suggested (in and out of these forums) boilerplate answers..."boot up in Safe Mode"..."create a different profile"...but they didn't actually read what specifically was happening, nor understanding that this happened on two totally different computers, running different operating systems, and completely different versions of software. If you have an identical problem in a situation like that I'm here to tell you Safe Mode and Profiles are NOT your answer.

The key to solving this issue was in seeing the little indicators as to what was happening on the lower right of the Outlook screen.

I don't know why nested Inbox folders suddenly became an issue on Outlook for desktop (remember it all worked on Webmail and on iOS) but they did and once it was gone so was my sync issue.