"Collapse DMs into folder" setting fails to hide or collapse active DM icons in the guild sidebar

Reproduction steps

Go to sidebar settings and enable Collapse DMs into folder.
Receive unread direct messages from multiple users.
Look at the guild sidebar to observe how the unread DMs are displayed.

Expected behaviour

Unread DMs should be collapsed into a single folder on the Fluxer button instead of remaining visible as separate icons.

Actual behaviour

Individual DM icons with unread message badges still remain visible and listed separately in the guild sidebar instead of being grouped together.

Build information

Version 2026.10.100, Beta 11, Channel Beta, Build 800, Android 13 (arm64), Device Xiaomi 21061110AG, Locale en-US, Push fcm, Flutter 3.47.7, Dart 3.13.5

Platform

Android, iOS