The Thumbnails issue is a server configuration issue i think. it looks like the server has Denial of service protection in place that will prevent synchronous php calls.
the file manager uses a php file to get to each thumbnails, through each thumbnail is a php file call.
We are planning on migrating to CKFinder for the file manager in the next upgrade which seams to work much better than KFM amd should prevent this sort of issue.
as for the folders, this is a setting when you add the HTML Editor instance.
In HTML Editor, edit the Preset and on the general tab, select the Show Directories in File Manager option.