How do I prevent Android Studio from automatically collapsing my packages in project navigation?

Question

I have run into this annoyance over and over again and have been unable to find a solution or an answer here for it:

When I create a package in my application and then a

Answer 1

In the 1:Project view, you have Hide Empty Middle Packages turned ON. You need to turn it off. Once turned off it will be shown as Compact Empty Middle Package. Please look at the screenshot attached.