Expand Folders only works with downloads. It shouldn't be disabled unless the selection disallows the operation.
It should work with SFTP or FTP. However the public beta on the website is extremely buggy, I am working to get an update out asap.
There is a newer one available to beta testers, the only requirement is that you must own a FlashFXP license, if you do contact me to get on the team!
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