Hovering over the <Insert> button brings up a secondary menu that allows you to choose whether to insert a test set or a test set folder (if you just click Insert it defaults to inserting a test set). In either case, it will insert the new folder / test set above the currently selected item – i.e. the one whose check-box has been selected, at the same level in the hierarchy. If you want to insert a new test set or sub-folder inside an existing folder, use the Insert > Child Test Set or Insert > Sub Folder option instead. If you insert a new folder / test set without first selected an existing item from the list, the new test set will simply be inserted at the end of the list.