Problem: In previous version of Firefox when you Show all bookmarks and search in the Bookmarks manager for a bookmark when a folder is selected, the search results are from outside the folder. Expected: Only bookmarks inside the folder are searched. Actual: Search results include bookmarks outside the folder.
this change was done on purpose to simplify the Library search UI. This happened years ago fwiw. I don't think we plan to change that for now, at least not until the Library moves in-content and we revise the whole UI for it.