I have a sln with about 50 projects. They are classified in folders, at least in VS.
In water the folders are shown, but empty, and the projects are shown as children of the root node.
In Visual Studio:
-Folder 1
|--Project 1
|--Project 2
-Folder 2
|--Project 3
In Water:
- Folder 1
- Folder 2
- Project 1
- Project 2
- Project 3
Regards