Visual Studio Can't Open Header Files in a Subdirectory and the Editor Doesn't Show Them

I’m structuring a project in the same way the ActionRPG project is structured. CPP and Header files are separated in Private and Public folders respectively, these work as expected. However, if I create a subfolder when I create a new class in the editor (for example the Items subfolder in ActionRPG) Visual Studio will throw an error that it cannot open the include file: no such file or directory.

I am able to create the class in Visual Studio instead of the editor and it can find the .h file; however, in either case created in editor or VS, the subfolder doesn’t show up in the editor. I have deleted the binaries, intermediate and saved folders and re-generated project files after doing this and still having the same issue. What am I missing?