we built the credential picker to quickly locate a credential using keyboard input. Once the picker appears, the idea is to type a fragment of the credential or folder to quickly filter and narrow down the options. Then you just use the cursor keys and hit enter when you located the correct credential. The whole workflow is optimized for this scenario. I'm not sure if we can provide a tree style view with the same filtering capabilities and at the same time ensure that credentials are not overlooked because they are hidden in a collapsed folder.
I have credentials in folders but when choose to do an Ad Hoc Connection they are in a flat list which makes identifying them slight tricky. It would be good if the credential picker displayed the credentials in their saved folder structure. This would also allow some folders to be collapsed.