diff --git a/src/ClaudeDo.Ui/ViewModels/Islands/ListFolderNavItemViewModel.cs b/src/ClaudeDo.Ui/ViewModels/Islands/ListFolderNavItemViewModel.cs
index e90fc12e..aa3264dd 100644
--- a/src/ClaudeDo.Ui/ViewModels/Islands/ListFolderNavItemViewModel.cs
+++ b/src/ClaudeDo.Ui/ViewModels/Islands/ListFolderNavItemViewModel.cs
@@ -16,9 +16,16 @@ public sealed partial class ListFolderNavItemViewModel : ViewModelBase
     public string? ParentFolderId { get; set; }
     [ObservableProperty] private string _name = "";
     [ObservableProperty] private string _iconKey = "Folder";
-    [ObservableProperty] private bool _isCollapsed;
+    [ObservableProperty]
+    [NotifyPropertyChangedFor(nameof(ShowCount))]
+    private bool _isCollapsed;
     // Sum of the descendant lists' counts, recursive — a collapsed folder still shows what's inside it.
-    [ObservableProperty] private int _count;
+    [ObservableProperty]
+    [NotifyPropertyChangedFor(nameof(ShowCount))]
+    private int _count;
+
+    /// <summary>Badge only while collapsed — expanded, the children show their own counts.</summary>
+    public bool ShowCount => IsCollapsed && Count > 0;
     // Set while a dragged list row hovers over the middle of this folder header (move-into-folder).
     [ObservableProperty] private bool _isDropTarget;
     // Insert-position hints for a drop next to the folder instead of into it. Drawn around the
diff --git a/src/ClaudeDo.Ui/ViewModels/Islands/ListNavItemViewModel.cs b/src/ClaudeDo.Ui/ViewModels/Islands/ListNavItemViewModel.cs
index 447551a8..87245e08 100644
--- a/src/ClaudeDo.Ui/ViewModels/Islands/ListNavItemViewModel.cs
+++ b/src/ClaudeDo.Ui/ViewModels/Islands/ListNavItemViewModel.cs
@@ -8,7 +8,12 @@ public sealed partial class ListNavItemViewModel : ViewModelBase
     public required string Id { get; init; }
     public required ListKind Kind { get; init; }
     [ObservableProperty] private string _name = "";
-    [ObservableProperty] private int _count;
+    [ObservableProperty]
+    [NotifyPropertyChangedFor(nameof(HasCount))]
+    private int _count;
+
+    /// <summary>Hides a "0" badge — an empty list reads as noise next to the real counts.</summary>
+    public bool HasCount => Count > 0;
     [ObservableProperty] private bool _isActive;
     [ObservableProperty] private string? _workingDir;
     [ObservableProperty] private string _defaultCommitType = CommitTypeRegistry.DefaultType;
diff --git a/src/ClaudeDo.Ui/ViewModels/Islands/ListsIslandViewModel.cs b/src/ClaudeDo.Ui/ViewModels/Islands/ListsIslandViewModel.cs
index 95803af2..63f687f9 100644
--- a/src/ClaudeDo.Ui/ViewModels/Islands/ListsIslandViewModel.cs
+++ b/src/ClaudeDo.Ui/ViewModels/Islands/ListsIslandViewModel.cs
@@ -30,6 +30,9 @@ public sealed partial class ListsIslandViewModel : ViewModelBase, IDisposable
     /// <summary>Icon key a folder falls back to when it has none of its own.</summary>
     public const string ListFolderIcon = "Folder";
 
+    /// <summary>Icon key a list falls back to — deliberately not the folder icon, so the two stay distinguishable.</summary>
+    public const string ListIcon = ListSettingsModalViewModel.DefaultIcon;
+
     private readonly IDbContextFactory<ClaudeDoDbContext> _dbFactory;
     private readonly IServiceProvider? _services;
     private readonly IWorkerClient? _worker;
@@ -368,7 +371,7 @@ public sealed partial class ListsIslandViewModel : ViewModelBase, IDisposable
                     Id = $"user:{l.Id}",
                     Name = l.Name,
                     Kind = ListKind.User,
-                    IconKey = l.Icon ?? "Folder",
+                    IconKey = l.Icon ?? ListIcon,
                     WorkingDir = l.WorkingDir,
                     DefaultCommitType = l.DefaultCommitType,
                     IsManual = l.IsManual,
@@ -473,7 +476,7 @@ public sealed partial class ListsIslandViewModel : ViewModelBase, IDisposable
             Id = $"user:{entity.Id}",
             Name = entity.Name,
             Kind = ListKind.User,
-            IconKey = "Folder",
+            IconKey = ListIcon,
             WorkingDir = entity.WorkingDir,
             DefaultCommitType = entity.DefaultCommitType,
         };
@@ -840,7 +843,7 @@ public sealed partial class ListsIslandViewModel : ViewModelBase, IDisposable
             row.DefaultCommitType = entity.DefaultCommitType;
             row.IsManual = entity.IsManual;
             row.FindingsTracked = entity.FindingsTracked;
-            row.IconKey = entity.Icon ?? "Folder";
+            row.IconKey = entity.Icon ?? ListIcon;
             row.HasTicketProject = hasTicketProject;
             RecomputeHasNoLinkedRepo();
         }
@@ -886,7 +889,7 @@ public sealed partial class ListsIslandViewModel : ViewModelBase, IDisposable
             Id = $"user:{entity.Id}",
             Name = entity.Name,
             Kind = ListKind.User,
-            IconKey = entity.Icon ?? "Folder",
+            IconKey = entity.Icon ?? ListIcon,
             WorkingDir = entity.WorkingDir,
             DefaultCommitType = entity.DefaultCommitType,
             IsManual = entity.IsManual,
diff --git a/src/ClaudeDo.Ui/ViewModels/Modals/ListSettingsModalViewModel.cs b/src/ClaudeDo.Ui/ViewModels/Modals/ListSettingsModalViewModel.cs
index 791ae825..cea6a3fe 100644
--- a/src/ClaudeDo.Ui/ViewModels/Modals/ListSettingsModalViewModel.cs
+++ b/src/ClaudeDo.Ui/ViewModels/Modals/ListSettingsModalViewModel.cs
@@ -111,7 +111,10 @@ public sealed partial class ListSettingsModalViewModel : ViewModelBase
 
     public ObservableCollection<string> CommitTypeOptions { get; } = new(CommitTypeRegistry.Types);
 
-    public const string DefaultIcon = "Folder";
+    public const string DefaultIcon = "Text";
+
+    /// <summary>Default icon for folders, kept apart from <see cref="DefaultIcon"/> so lists never look like folders.</summary>
+    public const string DefaultFolderIcon = "Folder";
 
     // Curated subset of the Icon.* geometry library in IslandStyles.axaml — window chrome and
     // pure stroke icons (PathIcon fills, so those render invisible) are deliberately left out.
@@ -171,7 +174,7 @@ public sealed partial class ListSettingsModalViewModel : ViewModelBase
         IsFolder = true;
         CanToggleFolder = false;
         Name = name;
-        Icon = IconOptions.Contains(icon) ? icon! : DefaultIcon;
+        Icon = IconOptions.Contains(icon) ? icon! : DefaultFolderIcon;
     }
 
     public async Task LoadAsync(
@@ -261,6 +264,13 @@ public sealed partial class ListSettingsModalViewModel : ViewModelBase
     // A manual list without a WorkingDir is untouched (empty is always valid) — this only fires
     // for the "picked a folder that turns out not to be a repo" case the audit found: it would
     // otherwise only surface as a Failed task the first time the worker tries to use it.
+    // The create-flow toggle swaps the untouched default so a new folder doesn't get the list icon.
+    partial void OnIsFolderChanged(bool value)
+    {
+        if (Icon == (value ? DefaultIcon : DefaultFolderIcon))
+            Icon = value ? DefaultFolderIcon : DefaultIcon;
+    }
+
     partial void OnWorkingDirChanged(string value)
     {
         if (string.IsNullOrWhiteSpace(value)) { WorkingDirWarning = ""; return; }
diff --git a/src/ClaudeDo.Ui/Views/Islands/ListsIslandView.axaml b/src/ClaudeDo.Ui/Views/Islands/ListsIslandView.axaml
index a9358906..181ce0a1 100644
--- a/src/ClaudeDo.Ui/Views/Islands/ListsIslandView.axaml
+++ b/src/ClaudeDo.Ui/Views/Islands/ListsIslandView.axaml
@@ -57,9 +57,11 @@
                         CommandParameter="{Binding}"/>
             </ContextMenu>
           </Border.ContextMenu>
-          <Grid ColumnDefinitions="20,*,Auto">
+          <!-- Empty leading column = the folder header's chevron slot, so list and folder icons
+               at the same depth line up. -->
+          <Grid ColumnDefinitions="12,20,*,Auto">
             <!-- Left accent bar for active state -->
-            <Border Grid.Column="0" Grid.ColumnSpan="3"
+            <Border Grid.Column="0" Grid.ColumnSpan="4"
                     Background="Transparent"
                     CornerRadius="8" IsHitTestVisible="False"
                     IsVisible="{Binding IsActive}">
@@ -70,18 +72,18 @@
                       Margin="-8,0,0,0"/>
             </Border>
             <!-- Icon (list-settings → Icon tab; "Folder" when unset) -->
-            <PathIcon Grid.Column="0" Classes="list-icon"
+            <PathIcon Grid.Column="1" Classes="list-icon"
                       Width="14" Height="14"
                       Data="{Binding IconKey, Converter={StaticResource IconKey}}"
                       HorizontalAlignment="Center" VerticalAlignment="Center"/>
             <!-- Name -->
-            <TextBlock Grid.Column="1" Classes="list-label"
-                       Text="{Binding Name}"
+            <TextBlock Grid.Column="2" Classes="list-label"
+                       Text="{Binding Name}" ToolTip.Tip="{Binding Name}"
                        VerticalAlignment="Center" Margin="8,0"
                        Foreground="{DynamicResource TextDimBrush}" FontSize="{StaticResource FontSizeBody}"/>
             <!-- Count -->
-            <TextBlock Grid.Column="2" Classes="list-count"
-                       Text="{Binding Count}"/>
+            <TextBlock Grid.Column="3" Classes="list-count"
+                       Text="{Binding Count}" IsVisible="{Binding HasCount}"/>
           </Grid>
         </Border>
 
@@ -131,17 +133,21 @@
                         Data="{Binding IconKey, Converter={StaticResource IconKey}}"
                         HorizontalAlignment="Center" VerticalAlignment="Center"/>
               <TextBlock Grid.Column="2" Classes="list-label"
-                         Text="{Binding Name}"
-                         VerticalAlignment="Center" Margin="8,0"
+                         Text="{Binding Name}" ToolTip.Tip="{Binding Name}"
+                         VerticalAlignment="Center" Margin="8,0" FontWeight="SemiBold"
                          Foreground="{DynamicResource TextDimBrush}" FontSize="{StaticResource FontSizeBody}"/>
               <TextBlock Grid.Column="3" Classes="list-count"
-                         Text="{Binding Count}"/>
+                         Text="{Binding Count}" IsVisible="{Binding ShowCount}"/>
             </Grid>
           </Border>
 
-          <ItemsControl ItemsSource="{Binding Children}"
-                        IsVisible="{Binding !IsCollapsed}"
-                        Margin="14,0,0,0"/>
+          <!-- Guide line drops from under the folder icon's centre (padding 10 + chevron 12 + half
+               of the 20px icon slot); children indent one icon slot past it. -->
+          <Panel IsVisible="{Binding !IsCollapsed}">
+            <Border Width="1" HorizontalAlignment="Left" Margin="31,0,0,4"
+                    Background="{DynamicResource LineBrush}" IsHitTestVisible="False"/>
+            <ItemsControl ItemsSource="{Binding Children}" Margin="20,0,0,0"/>
+          </Panel>
         </StackPanel>
 
         <Border Grid.Row="2" Height="2" VerticalAlignment="Center" Margin="4,0"
diff --git a/tests/ClaudeDo.Ui.Tests/ViewModels/ListSettingsModalViewModelTests.cs b/tests/ClaudeDo.Ui.Tests/ViewModels/ListSettingsModalViewModelTests.cs
index 375d7e9d..404399fd 100644
--- a/tests/ClaudeDo.Ui.Tests/ViewModels/ListSettingsModalViewModelTests.cs
+++ b/tests/ClaudeDo.Ui.Tests/ViewModels/ListSettingsModalViewModelTests.cs
@@ -59,6 +59,21 @@ public class ListSettingsModalViewModelTests
         }
     }
 
+    [Fact]
+    public void FolderToggle_SwapsUntouchedDefaultIcon_KeepsCustomChoice()
+    {
+        var vm = new ListSettingsModalViewModel(new CountingWorker(), NewFactory());
+
+        vm.IsFolder = true;
+        Assert.Equal(ListSettingsModalViewModel.DefaultFolderIcon, vm.Icon);
+        vm.IsFolder = false;
+        Assert.Equal(ListSettingsModalViewModel.DefaultIcon, vm.Icon);
+
+        vm.Icon = "Star";
+        vm.IsFolder = true;
+        Assert.Equal("Star", vm.Icon);
+    }
+
     [Fact]
     public async Task LoadAsync_CallsGetListConfig_ExactlyOnce()
     {