Make this the toolbar directory. Note, this does not mean that this directory will be added to the toolbar, this directory is the toolbar.
https://github.com/nix-community/home-manager/blob/master/modules%2Fprograms%2Ffirefox.nix#L425-L427
If you open the bookmarks utility in firefox, does it show as a folder as expected? I think maybe toolbar should be false if you expect to see your folder on the toolbar
On phone so testing or reading source is a bit tough, but maybe nesting folders like the above work?