It's a truly hideous, badly written piece of code, that never gets fixed, release after release. What more can I say?
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Have you used the library Window (Ctrl_Shift+B)? The bookmarks pane may have improvements it could use, but the vast majority of users find it works fine for them. You may be able to find an add-on at addons.mozilla.org that makes it easier to organize, or you can submit suggestions on how it can be fixed. This isn't the place to do that though.
What kind of problems do you have with organizing the bookmarks?