• VSCode Version: 1.48.0
• OS Version: Ubuntu 18.04

Steps to Reproduce:

1. Add some folders into a workplace
2. Add a folder (folder A) that contains only 1 file into the same workplace
3. Expand all folders
4. Click "Collapse Folders In Explorer" button
5. See the result

The interesting thing is: if you collapse the folder A, the "Collapse Folders In Explorer" button works normally again

This is an animation to demonstrate that:

Does this issue occur when all extensions are disabled?: Yes