Hi Ihatehandles,
Thank you for participating in the Apple Support Communities. We understand you're unable to add a folder in the Notes app. Keep in mind, the Notes app is limited to 5 subfolders so you won't be able to create another folder if you've already reached that limit. If that's not the issue, this article has some relevant steps that can help if an app isn't working properly: If an app on your iPhone or iPad stops responding, closes unexpectedly, or won’t open.
"If an app on your iPhone or iPad doesn't work as expected, try this.
- Close and reopen the app
Force the app to close. Then open the app to see if it works as expected.
2. Restart your device
Restart your iPhone or restart your iPad. Then open the app to see if it works as expected.
3. Check for updates
To see if updates are available for the app, open the App Store, tap your profile icon, then scroll down to see if updates are available. If updates aren't available for the app, update the software on your iPhone or iPad.
4. Delete the app, then redownload it
Delete the app. When you do this, you might lose data that was stored in the app. Then redownload the app. Then check to see if the problem with the app is fixed."
We hope this helps.
Take care.