To avoid confusion, let's get the terminology straight. In the attached screenshot, you'll see a single album project called
travels. It contains over 50 folders, one for each destination. It produces a single, integrated album, which has over 50 folders:
https://jefftucker.net/travels/
There is effectively no limit to the number of folders you can have in one album project. And each folder can, in turn, have as many subfolders as you care to create. There is effectively no limit to the depth of the folder tree, either.
Rather than dragging entire folders into the project, you might find it easier to keep things organized if you create each folder
within jAlbum, by clicking the
New folder icon, then opening that folder by double-clicking it, and then adding images to that folder.