Hi Guys,
i did get into the same issue of all of you .... I got mad and pist cause I still do not understand why Apple new releases are recently putting consumers into trouble expecially who works with gmail.
Anyways
I tried several times this option and tested with different incoming email moved into different folders and it seems to work.
in google website, under google mail setting, I set ALL MAIL folder as HIDE ( as label ) and flagged SHOW IN IMAP.
then quit.
When you open you Mail app, in the sidebar under mailboxes, you will see an ARCHIVE folder appearing.
It will show up tons of unread email that you can re select and mark as read.
After all of these..all the email moved from inbox to folders works reguallry and ONLY AFTER ABUNDANTLY 15-20 second, they disapear from inbox.
YOU NEED TO BE PATIENT AND WAIT ....i tested on iphone and ipad and everything syncornize perfectly...
hope it will help you