How to make Outlook show the unread count of a folder, including its sub-folders?

I have a partial answer for you that I use to show counts of unread items in sub folders.

This method gives an overall count of ALL unread items; but not a unread count for each sub folder.

You set this up once, and it will keep track with no further input from you.

I have my Outlook window configured to show set up to show the Navigation pane (Alt-F1) like this

I then create a search folder to count the unread mail, as shown in the next two pictures:

This keeps a count of the unread items and will show a list of them. Drag the Unread Mail folder to the Favorites pane within the Navigation Pane so that it is always visible even when the Search Folders is collapsed.

As a bonus, I find this is a very convenient way to keep track of all FLAGGED items,

The only easy way to make Outlook show the Unread count of the Software or Hardware sub-folders, is to move them to the same level as Inbox, Outbox, and all the other Outlook-supplied folders.

In effect, abolishing the hierarchy is the only solution. The unread count doesn't propagate, and has never done so in any version of Outlook, past or present. Nor does any addon exist that can do so (some such addons may at the most show you alerts for unread mail).

This solution isn't as shocking as it seems, since the only other solution : creating custom search folders, is essentially the same thing. Except that it aggregates all search folders without hierarchy under the "Search Folders" folder, instead of under the root folder.

You can also create a "Custom Search Folder", similar to what was described above, that looks at each subfolder you want to watch.

Start by creating a Search Folder. Then select the last option , "Create a custom search folder". Name it and click the Criteria button. In the "More Choices" tab, select the checkbox for "Only items that are" and select "unread" in the droplist. Then in the advanced tab, create the custom criteria. This can be teadeous if you have a lot of folders, but it will work. For the "Field" use "In Folder". Set the condition to "IS" and set the Value be the name of the subfolder. If you add a rule for each subfolder you will get a total unread for all subfolders.