diff --git a/public/css/tags.css b/public/css/tags.css
index 11806c69a..9075f659e 100644
--- a/public/css/tags.css
+++ b/public/css/tags.css
@@ -193,7 +193,8 @@
     filter: brightness(75%) saturate(0.6);
 }
 
-.tag_as_folder:hover {
+.tag_as_folder:hover,
+.tag_as_folder.flash {
     filter: brightness(150%) saturate(0.6) !important;
 }
 
diff --git a/public/script.js b/public/script.js
index fadec3227..4fc07fc6f 100644
--- a/public/script.js
+++ b/public/script.js
@@ -191,7 +191,7 @@ import { NOTE_MODULE_NAME, initAuthorsNote, metadata_keys, setFloatingPrompt, sh
 import { registerPromptManagerMigration } from './scripts/PromptManager.js';
 import { getRegexedString, regex_placement } from './scripts/extensions/regex/engine.js';
 import { initLogprobs, saveLogprobsForActiveMessage } from './scripts/logprobs.js';
-import { FILTER_TYPES, FilterHelper } from './scripts/filters.js';
+import { FILTER_STATES, FILTER_TYPES, FilterHelper, isFilterState } from './scripts/filters.js';
 import { getCfgPrompt, getGuidanceScale, initCfg } from './scripts/cfg-scale.js';
 import {
     force_output_sequence,
@@ -1387,7 +1387,7 @@ function verifyCharactersSearchSortRule() {
  * @typedef {object} Entity - Object representing a display entity
  * @property {Character|Group|import('./scripts/tags.js').Tag|*} item - The item
  * @property {string|number} id - The id
- * @property {string} type - The type of this entity (character, group, tag)
+ * @property {'character'|'group'|'tag'} type - The type of this entity (character, group, tag)
  * @property {Entity[]} [entities] - An optional list of entities relevant for this item
  * @property {number} [hidden] - An optional number representing how many hidden entities this entity contains
  */
@@ -1462,7 +1462,11 @@ export function getEntitiesList({ doFilter = false, doSort = true } = {}) {
             const subCount = subEntities.length;
             subEntities = filterByTagState(entities, { subForEntity: entity });
             if (doFilter) {
-                subEntities = entitiesFilter.applyFilters(subEntities, { clearScoreCache: false });
+                // sub entities filter "hacked" because folder filter should not be applied there, so even in "only folders" mode characters show up
+                subEntities = entitiesFilter.applyFilters(subEntities, { clearScoreCache: false, tempOverrides: { [FILTER_TYPES.FOLDER]: FILTER_STATES.UNDEFINED } });
+            }
+            if (doSort) {
+                sortEntitiesList(subEntities);
             }
             entity.entities = subEntities;
             entity.hidden = subCount - subEntities.length;
@@ -1471,8 +1475,13 @@ export function getEntitiesList({ doFilter = false, doSort = true } = {}) {
 
     // Second run filters, hiding whatever should be filtered later
     if (doFilter) {
-        entities = filterByTagState(entities, { globalDisplayFilters: true });
-        entities = entitiesFilter.applyFilters(entities);
+        const beforeFinalEntities = filterByTagState(entities, { globalDisplayFilters: true });
+        entities = entitiesFilter.applyFilters(beforeFinalEntities);
+
+        // Magic for folder filter. If that one is enabled, and no folders are display anymore, we remove that filter to actually show the characters.
+        if (isFilterState(entitiesFilter.getFilterData(FILTER_TYPES.FOLDER), FILTER_STATES.SELECTED) && entities.filter(x => x.type == 'tag').length == 0) {
+            entities = entitiesFilter.applyFilters(beforeFinalEntities, { tempOverrides: { [FILTER_TYPES.FOLDER]: FILTER_STATES.UNDEFINED } });
+        }
     }
 
     if (doSort) {
diff --git a/public/scripts/filters.js b/public/scripts/filters.js
index 09bd86cc3..adc27b349 100644
--- a/public/scripts/filters.js
+++ b/public/scripts/filters.js
@@ -258,9 +258,8 @@ export class FilterHelper {
      */
     folderFilter(data) {
         const state = this.filterData[FILTER_TYPES.FOLDER];
-        // Slightly different than the other filters, as a positive folder filter means it doesn't filter anything (folders get "not hidden" at another place),
-        // while a negative state should then filter out all folders.
-        const isFolder = entity => isFilterState(state, FILTER_STATES.SELECTED) ? true : entity.type === 'tag';
+        // Filter directly on folder. Special rules on still displaying characters with active folder filter are implemented in 'getEntitiesList' directly.
+        const isFolder = entity => entity.type === 'tag';
 
         return this.filterDataByState(data, state, isFolder);
     }
@@ -342,15 +341,40 @@ export class FilterHelper {
      * Applies all filters to the given data.
      * @param {any[]} data - The data to filter.
      * @param {object} options - Optional call parameters
-     * @param {boolean|FilterType} [options.clearScoreCache=true] - Whether the score
+     * @param {boolean} [options.clearScoreCache=true] - Whether the score cache should be cleared.
+     * @param {Object.<FilterType, any>} [options.tempOverrides={}] - Temporarily override specific filters for this filter application
      * @returns {any[]} The filtered data.
      */
-    applyFilters(data, { clearScoreCache = true } = {}) {
+    applyFilters(data, { clearScoreCache = true, tempOverrides = {} } = {}) {
         if (clearScoreCache) this.clearScoreCache();
-        return Object.values(this.filterFunctions)
-            .reduce((data, fn) => fn(data), data);
+
+        // Save original filter states
+        const originalStates = {};
+        for (const key in tempOverrides) {
+            originalStates[key] = this.filterData[key];
+            this.filterData[key] = tempOverrides[key];
+        }
+
+        try {
+            const result = Object.values(this.filterFunctions)
+                .reduce((data, fn) => fn(data), data);
+
+            // Restore original filter states
+            for (const key in originalStates) {
+                this.filterData[key] = originalStates[key];
+            }
+
+            return result;
+        } catch (error) {
+            // Restore original filter states in case of an error
+            for (const key in originalStates) {
+                this.filterData[key] = originalStates[key];
+            }
+            throw error;
+        }
     }
 
+
     /**
      * Cache scores for a specific filter type
      * @param {FilterType} type - The type of data being cached
diff --git a/public/scripts/tags.js b/public/scripts/tags.js
index 64e83428c..389e06864 100644
--- a/public/scripts/tags.js
+++ b/public/scripts/tags.js
@@ -17,6 +17,7 @@ import { FILTER_TYPES, FILTER_STATES, DEFAULT_FILTER_STATE, isFilterState, Filte
 import { groupCandidatesFilter, groups, selected_group } from './group-chats.js';
 import { download, onlyUnique, parseJsonFile, uuidv4, getSortableDelay, flashHighlight } from './utils.js';
 import { power_user } from './power-user.js';
+import { debounce_timeout } from './constants.js';
 
 export {
     TAG_FOLDER_TYPES,
@@ -63,7 +64,7 @@ export const tag_filter_types = {
 const ACTIONABLE_TAGS = {
     FAV: { id: '1', sort_order: 1, name: 'Show only favorites', color: 'rgba(255, 255, 0, 0.5)', action: filterByFav, icon: 'fa-solid fa-star', class: 'filterByFavorites' },
     GROUP: { id: '0', sort_order: 2, name: 'Show only groups', color: 'rgba(100, 100, 100, 0.5)', action: filterByGroups, icon: 'fa-solid fa-users', class: 'filterByGroups' },
-    FOLDER: { id: '4', sort_order: 3, name: 'Always show folders', color: 'rgba(120, 120, 120, 0.5)', action: filterByFolder, icon: 'fa-solid fa-folder-plus', class: 'filterByFolder' },
+    FOLDER: { id: '4', sort_order: 3, name: 'Show only folders', color: 'rgba(120, 120, 120, 0.5)', action: filterByFolder, icon: 'fa-solid fa-folder-plus', class: 'filterByFolder' },
     VIEW: { id: '2', sort_order: 4, name: 'Manage tags', color: 'rgba(150, 100, 100, 0.5)', action: onViewTagsListClick, icon: 'fa-solid fa-gear', class: 'manageTags' },
     HINT: { id: '3', sort_order: 5, name: 'Show Tag List', color: 'rgba(150, 100, 100, 0.5)', action: onTagListHintClick, icon: 'fa-solid fa-tags', class: 'showTagList' },
     UNFILTER: { id: '5', sort_order: 6, name: 'Clear all filters', action: onClearAllFiltersClick, icon: 'fa-solid fa-filter-circle-xmark', class: 'clearAllFilters' },
@@ -174,9 +175,8 @@ function filterByTagState(entities, { globalDisplayFilters = false, subForEntity
             }
 
             // Hide folders that have 0 visible sub entities after the first filtering round
-            const alwaysFolder = isFilterState(entitiesFilter.getFilterData(FILTER_TYPES.FOLDER), FILTER_STATES.SELECTED);
             if (entity.type === 'tag') {
-                return alwaysFolder || entity.entities.length > 0;
+                return entity.entities.length > 0;
             }
 
             return true;
@@ -322,6 +322,13 @@ function filterByGroups(filterHelper) {
  * @param {FilterHelper} filterHelper Instance of FilterHelper class.
  */
 function filterByFolder(filterHelper) {
+    if (!power_user.bogus_folders) {
+        $('#bogus_folders').prop('checked', true).trigger('input');
+        onViewTagsListClick();
+        flashHighlight($('#dialogue_popup .tag_as_folder, #dialogue_popup .tag_folder_indicator'));
+        return;
+    }
+
     const state = toggleTagThreeState($(this));
     ACTIONABLE_TAGS.FOLDER.filter_state = state;
     filterHelper.setFilterData(FILTER_TYPES.FOLDER, state);
@@ -883,8 +890,9 @@ function printTagFilters(type = tag_filter_types.character) {
     const FILTER_SELECTOR = type === tag_filter_types.character ? CHARACTER_FILTER_SELECTOR : GROUP_FILTER_SELECTOR;
     $(FILTER_SELECTOR).empty();
 
-    // Print all action tags. (Exclude folder if that setting isn't chosen)
-    const actionTags = Object.values(ACTIONABLE_TAGS).filter(tag => power_user.bogus_folders || tag.id != ACTIONABLE_TAGS.FOLDER.id);
+    // Print all action tags. (Rework 'Folder' button to some kind of onboarding if no folders are enabled yet)
+    const actionTags = Object.values(ACTIONABLE_TAGS);
+    actionTags.find(x => x == ACTIONABLE_TAGS.FOLDER).name = power_user.bogus_folders ? 'Show only folders' : 'Enable \'Tags as Folder\'\n\nAllows characters to be grouped in folders by their assigned tags.\nTags have to be explicitly chosen as folder to show up.\n\nClick here to start';
     printTagList($(FILTER_SELECTOR), { empty: false, sort: false, tags: actionTags, tagActionSelector: tag => tag.action, tagOptions: { isGeneralList: true } });
 
     const inListActionTags = Object.values(InListActionable);