Using Plone 6.0.12, I cloned the Page and Folder content types to create Note and Notes Folder content types (to make it easier to restrict what is addable in a note folder).
A Notes Folder can contain Note, Image, File, Notes Folder, and Collection content types.
I've created a Notes Folder and added a collection in it.
However, when I am looking at the Notes Folder and use Display -> Select an item as default view... I get "There are no items in this folder that can be selected as a default view page."
...I just checked with a regular folder: same issue... a collection in that folder does not appear in that Display -> Select an item as default view... popup.