As Barney pointed out, it looks like your local configuration is wrong for GMAIL.
This is what is should look like. This image shows GMAIL and also Exchange, they look similar.

Your image shows an odd "\Trash" instead of "Trash." Your nesting of other folders inside your Inbox indicates some improper changes were made inside your Mail folder inside your Library folder. I suspect this is related to your issue.
Look inside your user Library folder, there should be a Mail folder, which should look something like this (for Monterey you should see V9, this image shows V8 for a Big Sur computer):

Instead of just deleting and reading your GMAIL account, you might try removing the GMAIl account, quitting Mail, moving the GMAIL-related folders in this Library/Mail directory to the desktop, restart the computer, then try re-adding the GMAIL account. Perhaps that will create the folder structure properly.
If this does not work, you can restore the folders back to where they were. I would also back up your computer before doing any of this in case it goes south and you need to completely restore your user Library folder to the way it was.