There is no limit on the number of Folders or Sub-folders.
You can create as many as you like.
The hierarchy goes up to 5 levels in total: a "parent Folder" and 4 levels of "child Folders."
Various permissions can be set per parent Folder.
Related:
Create folder (Web Browser)
https://teachme.jp/8/manuals/4929440
Create, delete or edit sub-folder (Web Browser)
https://teachme.jp/8/manuals/4929349
How to change users' permissions (Administrator, Editor, Viewer) for a Folder
How to change users' permissions (Administrator, Editor, Viewer) for a Folder