You’re not actually browsing “folders” in the Clip’s UI. It builds the lists based on tag info stored in each audio file. The actual folder/file structure has no relevance to how the files are displayed in the Clip’s UI. Each file has Genre, Artist, Album, Title & Track Number tags that need to be populated for the browsing to work 100%.
For a Linux user, EasyTag is probably the best option for a tag editor. It also has a feature that can set the tag info based on the folder/files names which can be a big help if you have a lot of files with missing tags. Make sure you select ID3v2.3 ISO-8859-1 as the tag format. ID3v2.1 & 2.4 formats as well as UTF encodings are either not supported or unreliable at this time. Note that EasyTag will probably default to ID3v2.4 UTF, so it’s important to set it to ID3v2.3 ISO-8859-1.
Note, Sandisk just added folder browsing to the latest Fuze firmware, so I would expect that it should show up on the Clip as well in the next few months, at which point you can ignore the tags if you want. But until then you’ll need to get your tags straightens out.