Neither build option will allow the style picker to pick up the styles in a sub folder. I also agree that the the manual would apppear to imply that only the styles folder can hold styles. I'm not suree it was always that way though. Anyway, the reason I tried this was that a youtube video did exactly that.

Anyway, if it doesn't do then I'm happy enough, although it is a pretty poor way to manage user/system styles.