soxfan, thanks for testing it out. If I read it right, the RFC (section 6.3.6 in
http://www.faqs.org/rfcs/rfc3501.html), says nothing about how clients should handle this case. So maybe it's just up to the programmer to decide what to do -- maybe the Mozilla people decided one way, and MS decided another way.
Oh well it's not a mainstream case -- where someone uses both TB and Outlook and starts creating subfolders in both, but worthwhile to note and know beforehand. Also, while it's not a usual case, it could matter even more depending on who the user is.