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In the Folders panel, right-click on "/" and do Hide This Parent. Then right-click on "Users" and do Hide This Parent. Keep working your way down until you have just the folders showing that you want.
To answer your question:
How and why this has happened I do not know? I am always very strict about where I place my files when importing.
Apparently if you hold down the Option key on a Mac and drag the Library left panel border to the RIGHT it expands the path. I'm not on a Mac so can't test this, but try holing down the Option key and drag the Library left panel border to the LEFT.
Thanks very much for the help!
I have just started removing parent folders and this seems to be correcting the problem. A slightly laborious task but doing the trick!
The folders panel still looks different to me (size of font) and I'm still curious just why this happened in the first place? Any ideas?
Cheers and apologies for the last response........ just got busy!
Thanks for the reply. I appreciate your time.
I've tried your little trick but I can't seem to drag the panel. No problem as I think I've got the issue sorted now.