In the "new" outlook, why aren't my subfolders in alphabetical order?

In new Outlook, folder order is not always preserved automatically across sessions unless Custom folder order is enabled. If folders return to the top after signing in again, switch the folder pane to a supported ordering mode instead of relying only on drag-and-drop.

Try this in new Outlook:

1. Go to Mail.
2. Select View on the ribbon.
3. Select Folder pane.
4. If the goal is manual placement, make sure Custom folder order is selected.
5. Then drag the subfolders to the preferred position, or right-click and use Move up or Move down.

If the goal is alphabetical order, use the built-in sort instead:

1. Go to View.
2. Select Sort Folders > Order folders A to Z.

Important details:

• In new Outlook, folders can be reordered by drag-and-drop only when Custom folder order is enabled.
• Search, Shared with me, and In-place archive folders can’t be moved and always stay last for an account.
• In classic Outlook on the web, created folders are arranged alphabetically again the next time of sign-in. That matches the behavior being seen where manual placement does not persist.

If the requirement is specifically that child subfolders always stay automatically alphabetized under a parent folder, the available guidance shows using Order folders A to Z rather than expecting manual placement to persist.

• Change the order of folders in the Folder Pane in Outlook
• Working with message folders in Outlook on the web