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In a fresh Java project create a class first.second.Test. (project folder as root or not) Make a source filter: Project Preferences > Java Build Path > Source Folder > Included: first/second/Test.java Switch the Package Explorer view to Layout > Hierarchical. Then you see only the folder first. PackageFragment and CompilationUnit is hidden. In the flat layout everything is OK.
*** This bug has been marked as a duplicate of 65240 ***