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Hi Syed Hasan Abbas Naqvi,
Thank you for querying in this forum.
From your description, it seems that your client tries to upload a folder to SharePoint Document library, however, you found only subfolders which contain files show in the library, the subfolder which not contain files will not show in the library.
May I know if my understanding is right? If so, we have also tested it on our side, we created a folder and two subfolders, as shown below:
After uploading to SharePoint, it only show the subfolder which contains file.
We can reproduce the same situation. We’re sorry that it doesn’t meet your requirement, we do understand the inconvenience caused and apologize for it. As you mentioned above, we can only upload file via dragging and dropping folders.
To address your concern, we’d suggest you go to SharePoint Feedback Community to provide your feedback. This is the best platform to let us hear from you and make our products and services better for you and others.
And for your concern about using PowerShell to upload folders, we have also searched a lot, and we found the related article: How to import (upload) an entire folder of files to SharePoint using PowerShell – Cameron Dwyer How to upload files to SharePoint using PowerShell - EnjoySharePoint
Since our category focus on SharePoint Online built-in features, to make sure you get professional help, we’d suggest you go to Microsoft Q & A and post a new thread, which is specific channel to handle such situation.
Disclaimer: Microsoft provides no assurances and/or warranties, implied or otherwise, and is not responsible for the information you receive from the third-party linked sites or any support related to technology.
Your understanding and patience will be highly appreciated. I hope you have a safe and a Happy New Year.
Best Regards,
Sukie