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You can do it the ghetto way by dragging a folder and dropping it back into the same library (or sub-folder if you want to rearrange folders within a folder.) Each time you do this the folder you dragged will go down to the bottom, so you can ultimately put them in the order you want by dragging all of them in sequence.
But yes it's annoying that you can't put them how you want them easily, or even sort folders by name.
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