Usually with a psd file with multiple layers, all the folders (composition) import to their own sizes like shown in the second picture which is how its supposed to look. However sometimes their individual compositions take up all of the screen. Any idea why / fix?
Start by looking for stray pixels from incomplete selections, layer masks or even things like "invisible" pixels being retained after crop operations. Even a faint pixel with 0.01% opacity of cancvas is still a valid pixel in PS and affects the layer bounding box and as such the behavior would then be correct. Similarly, some layer styles and adjustment layers in PS cause the layer to be rendered larger due to how this stuff works under the hood. E.g. gradient overlays can do some funky stuff. and of course simply using things like blending modes or reduced transparencies may already cause unwanted layer flattening/ merging, too. In any case, this is more an issue of how the PSD is structured rathewr than how AE reads it.
Without seeing the structure of your PSD file's layers it's impossible to tell. Cropped screenshot showing only the rendering errors are pretty useless in diagnosing problems.
Start by selecting all layers in the main comp created when you import a PSD as a comp and press the U key twice. You should see different position values but the scale should all be 100%. If nothing is out of place, start looking at all nested comps AE created from layers and groups in the PSD.
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