Perhaps the option can be implemented with the following global perferences:

* checkbox "always hide all folders in Flat view"
...* checkbox "always hide empty folders in Flat view" (indented)

* checkbox "always hide empty folders in Outline view"

That would be just about ideal.

Even better would be toolbar buttons to temporarily toggle between show-all/hide-empty/hide-all folders in whatever view is active (with hide all only for Flat view), in additional to the global preferences above.