[Dovecot] dovecot v 1.28 and virtual folders

[Jim Richard]

I haven't been able to make this work. I've experimented with
different settings in my dovecot.conf for hours.

I have a simple single user ubuntu setup, nothing fancy and would just
like to have a virtual "unread" folder of my main INBOX, for use with
Squirrelmail

So, with just this, all good... subfolders look like
.INBOX.duplicates     for example in the file system

namespace private {
  separator = .
  location =  maildir:~/Maildir
  inbox = yes
}

now, when I try to add a virtual namespace

namespace private {
  subscriptions = yes
  list = yes
  inbox = no
  prefix = virtual.
  separator = .
  location = virtual:~/Maildir/virtual
}

~/Maildir/virtual does exist in the filesystem, I can "subscribe" to
virtual but if I try to create a sub folder of it I get

ERROR: Could not complete request.
Query: CREATE "virtual.test"
Reason Given: [CANNOT] Can't create virtual mailboxes

Squirrelmail is great because it has some nice IMAP testing tools, so
for example, with my current dovecot config I can test the NAMESPACE
command, is that the correct response?

Request:
A003 NAMESPACE
Response:
* NAMESPACE (("" ".")("virtual." ".")) NIL NIL
Namespace completed.

I'm sure the issue is a fundamental lack of understanding of a concept
here ... Any help would be appreciated.

thank you,
-Jim