I am also having the same problem. I finished writing a note a few hours ago, then clicked on the back arrow to go to my list of notes. I then clicked on “folders.” The screen froze for a second, then it refreshed and it only showed an Outlook folder with no notes. No “local folder”, no “on my iPhone” folder with my 10 notes. Just the outlook folder with zero notes. I made sure the notes settings were all set right, turned my phone off and on, and no change. I then updated to 15.5, hoping to fix it, but to no avail. I am using an iPhone 12 Mini.