If you look at the folders you create for email in outlook, you can create subfolders and view that hierarchy.

For tasks, you can also create sub folders, but the hierarchy view is gone in Outlook for Mac.  If I look at the same account on Outlook for Windows, the hierarchy is there and shows up correctly.

So, it appears that this is a UI bug in Outlook for the Mac, as the folder hierarchy is there, it's just not displayed properly