The current behavior of the HCL Highlightes files widget only permits you to select the parent folder to display in the widget. This request is to allow users to select subfolders as well.
created a Community
Navigated to Highlights
Select Widgets->Add widgets panel
under content sources
in the Channel config
If you try to enter the name of a nested folder it does not locate it
If you enter the name of the highest level folder in the tree it locates it and allows you to select the folder.
NOTE: this is the same behavior in Connections 6.0CR4, 6.5CR1, 7.0