I think you've tripped over a longstanding Windows LR limitation of the Folders, Collections, and Keyword List panels -- they only allow about 1000 - 3000 lines (depending on the size of the currently used font):
The workaround is to use a hierarchy of folders and keep most of the parent folders collapsed, so that fewer lines are displayed in the Folders panel. If you need to introduce more hierarchy, you can do that directly in the Folders panel, dragging folders into their new parent folders.
It's pretty shameful that Adobe has never fixed this.
[Use the blue reply button under the first post to ensure replies sort properly.]