A cloud-based service included in Microsoft 365, delivering scalable messaging and collaboration features with simplified management and automatic updates.
What the M365 portal refers to as Read and manage permissions is actually Full access, so in this scenario you are not granting read-only permissions. The only way to grant such is by leveraging folder-level permissions, without granting Full access ones.
And yes, you need to stamp them on each folder, including newly created ones. While the process is indeed more complicated that it has to be, you can use PowerShell script to automate it. Here's one I wrote a while back that allows you to cover all folders in one go, or choose a subset if needed: https://michev.info/blog/post/5763/managing-mailbox-folder-permissions-in-bulk-in-microsoft-365