STR:
Open a folder as Workspace.
Expand the root folder.
Press the "Collapse All" button.

Result:
The folder-image is "expanded".

Just an interesting minor issue.

Notepad++ v7.8.9 (32-bit)
Build time : Sep 25 2020 - 21:35:54
Path : C:---\Notepad++.Win32.Unicode Release.exe
Admin mode : ON
Local Conf mode : ON
OS Name : Windows 7 Enterprise (32-bit)
OS Build : 7601.23964
Current ANSI codepage : 1255
Plugins : ComparePlus.dll HTMLTag_unicode.dll MenuIcons.dll PythonScript.dll _CustomizeToolbar.dll