STEPS:
Open Resolve in the Edit Page
Make a timeline
Drag some clips in to the timeline
Go to the Finder
Create a subfolder and drag the clips into it
Go back to Resolve
The media should now be offline
Click on the little red chainlink in the upper left of the UI to bring up the Relink Media dialog
Notice that there's no indication of
which clips are offline in the project. This makes managing unlinked media a major pain.
Click on the Browse button
Go to the folder where the media used to live - the one that now contains the subfolder
Click Open
RESULT
No media files found
EXPECT
The files in the subfolder to be found
Hit Browse again
Navigate into the subfolder
Clip Open
RESULT
The files are found and the clips relinked
I believe things have been this way for quite a long time.
Video: