diff --git a/examples/official-storybook/stories/addon-docs/mixed-leaves-component.stories.js b/examples/official-storybook/stories/addon-docs/mixed-leaves-component.stories.js
new file mode 100644
index 000000000000..3d6a49874f1c
--- /dev/null
+++ b/examples/official-storybook/stories/addon-docs/mixed-leaves-component.stories.js
@@ -0,0 +1,13 @@
+// This example exists solely to demonstrate nav hierarchy
+// in --docs mode when a folder contains both a component and
+// individual stories
+//
+// See also ./mixed-leaves-folder.stories.js
+
+export default {
+  title: 'Addons/Docs/Mixed Leaves/Component',
+  parameters: { chromatic: { disable: true } },
+};
+
+export const B = () => 'b';
+export const C = () => 'c';
diff --git a/examples/official-storybook/stories/addon-docs/mixed-leaves-folder.stories.js b/examples/official-storybook/stories/addon-docs/mixed-leaves-folder.stories.js
new file mode 100644
index 000000000000..2f9216606fe9
--- /dev/null
+++ b/examples/official-storybook/stories/addon-docs/mixed-leaves-folder.stories.js
@@ -0,0 +1,12 @@
+// This example exists solely to demonstrate nav hierarchy
+// in --docs mode when a folder contains both a component and
+// individual stories
+//
+// See also ./mixed-leaves-component.stories.js
+
+export default {
+  title: 'Addons/Docs/Mixed Leaves',
+  parameters: { chromatic: { disable: true } },
+};
+
+export const A = () => 'a';
diff --git a/examples/official-storybook/stories/core/named-export-order.stories.js b/examples/official-storybook/stories/core/named-export-order.stories.js
index 34c54ca0e2e8..03fda7eb5bcf 100644
--- a/examples/official-storybook/stories/core/named-export-order.stories.js
+++ b/examples/official-storybook/stories/core/named-export-order.stories.js
@@ -1,7 +1,6 @@
-import React from 'react';
-
 export default {
   title: 'Core/Named Export Order',
+  parameters: { chromatic: { disable: true } },
 };
 
 export const Story1 = () => 'story1';
diff --git a/lib/ui/src/containers/nav.js b/lib/ui/src/containers/nav.js
index 9bc5dc0533e8..0989c6ac84d0 100755
--- a/lib/ui/src/containers/nav.js
+++ b/lib/ui/src/containers/nav.js
@@ -4,7 +4,6 @@ import memoize from 'memoizerific';
 
 import { Badge } from '@storybook/components';
 import { Consumer } from '@storybook/api';
-import { logger } from '@storybook/client-logger';
 
 import { shortcutToHumanString } from '../libs/shortcut';
 
@@ -114,11 +113,19 @@ export const collapseAllStories = stories => {
   const componentIdToLeafId = {};
 
   // 1) remove all leaves
-  const leavesRemoved = Object.values(stories).filter(item => !item.isLeaf);
+  const leavesRemoved = Object.values(stories).filter(
+    item => !(item.isLeaf && stories[item.parent].isComponent)
+  );
 
   // 2) make all components leaves and rewrite their ID's to the first leaf child
   const componentsFlattened = leavesRemoved.map(item => {
     const { id, isComponent, children, ...rest } = item;
+
+    // this is a folder, so just leave it alone
+    if (!isComponent) {
+      return item;
+    }
+
     const nonLeafChildren = [];
     const leafChildren = [];
     children.forEach(child => (stories[child].isLeaf ? leafChildren : nonLeafChildren).push(child));
@@ -131,21 +138,13 @@ export const collapseAllStories = stories => {
     const component = { ...rest, id: leafId, isLeaf: true, isComponent: true };
     componentIdToLeafId[id] = leafId;
 
-    if (
-      (isComponent && nonLeafChildren.length > 0) ||
-      (!isComponent && nonLeafChildren.length === 0)
-    ) {
+    // this is a component, so it should not have any non-leaf children
+    if (nonLeafChildren.length !== 0) {
       throw new Error(
         `Unexpected '${item.id}': ${JSON.stringify({ isComponent, nonLeafChildren })}`
       );
     }
 
-    if (nonLeafChildren.length > 0) {
-      logger.error(
-        `Node ${item.id} contains non-leaf nodes that are getting removed: ${nonLeafChildren}!`
-      );
-    }
-
     return component;
   });
 
diff --git a/lib/ui/src/containers/nav.test.js b/lib/ui/src/containers/nav.test.js
index 91ece2ac1feb..96ef56a634f2 100644
--- a/lib/ui/src/containers/nav.test.js
+++ b/lib/ui/src/containers/nav.test.js
@@ -58,12 +58,35 @@ describe('collapse all stories', () => {
       ...stories,
       a1: { ...a1, ...docsOnly },
     };
-    const filtered = collapseAllStories(hasDocsOnly);
-    expect(filtered.a1).toEqual({
+    const collapsed = collapseAllStories(hasDocsOnly);
+    expect(collapsed.a1).toEqual({
       id: 'a1',
       isComponent: true,
       isLeaf: true,
       parent: 'root',
     });
   });
+  it('collapses mixtures of leaf and non-leaf children', () => {
+    const mixedRoot = { id: 'root', parent: false, children: ['a', 'b1'] };
+    const mixed = { root: mixedRoot, a, a1, b1: { ...b1, parent: 'root' } };
+    const collapsed = collapseAllStories(mixed);
+    expect(collapsed).toEqual({
+      a1: {
+        id: 'a1',
+        isComponent: true,
+        isLeaf: true,
+        parent: 'root',
+      },
+      b1: {
+        id: 'b1',
+        isLeaf: true,
+        parent: 'root',
+      },
+      root: {
+        children: ['a1', 'b1'],
+        id: 'root',
+        parent: false,
+      },
+    });
+  });
 });