IMP doesn't have anything to do with how folders are "implemented". 
Your IMAP server simply doesn't support subfolders of folders that 
contain mail. You need to create testupper/sublower in one go.

When in a folder called testupper located inside the inbox and trying 
to create a subfolder under testupper called "lower1" the followin 
error is generated with horde 3.0.2.



"The folder "testupper/lower1" was not created. This is what the 
server said: CREATE failed: Can't create mailbox node 
/home/mail/mydomain.com/username/testupper/: File exists"



When looking into the directory where the mailbox is stored I see a 
file testupper but not a folder nor do I see a testupper.lower1 file 
that I would expect to see if horde is implementing folders as a 
single file.