gokbali wrote:
Thanks for your reply. I checked — Notes is not listed under “Open at Login,” and I also tried relaunching it while holding the Shift key. Unfortunately, the issue still happens — every time I open Notes, all folders appear expanded again.
https://discussions.apple.com/content/attachment/53af436d-bea8-40e4-ad0a-ce2cb90a4e82
I do not have 'nested' folders like your example; so I can add no further insight here.

Known issue tend to get prioritized in point-updates... therefore
To be proactive you can file a bug report / submit your Apple Feedback direct to the Product Team here:
Feedback - Notes - Apple
The current stable release of Tahoe including bug fixes, security updates is macOS 26.0.1
Keep your Mac up to date - Apple Support
Keep your Mac up to date - Apple Support
If it only happens when launching the App, then the alternative is don't quit the app. Leave it in full screen mode, a swipe away in Mission Control for you issue.
Don't restart your Mac, simply let it sleep and pickup where you left off, this is what sleep (or close the lid on a notebook) is for...so you do not have to restart.