I too spent some time looking for a subfolders feature... would it really be so bad to have subfolders? "Subtasks" dont really do what subfolders would do, it seems to me. Subfolders are a 'heading' to help the user organize the relationships between different realms in their lives (into which particular tasks & subtasks would go). Also that way we could see the subfolders in folder view.
This is a feedback after I have been using Toodledo for 1.5 years, particularly on Subfolders. I made an extensive comparison of tools available by that time before I went for Toodledo.
The lack of adequate hierarchy in the organisation of tasks and folders seems to be an issue for many other Todo applications. Toodledo was better than other apps, but still, the lack of subfolders was frustrating.
Toodledo has several layers, which could be used for a hierarchy, like Contexts, Folders, and Tags. However, you would have to enter all these values manually, in order to build a sort of hierarchy by yourself, which can be sometimes time-consuming and a mess, particularly if you start having more than 250 ToDos .. The consequence is that I usually classify my ToDos according to the Context, and that's it. No Folders, never used Tags. I still use Subtasks though, but it's not enough.
What I want to say is: I don't care if you call it "Context", "Folder", or "Subtask". What I would like to have is simply a clean hierarchy as we know it from file systems. That would make my live easier.