Unfortunately, I'm seeing the opposite results. If I have altnamespace=no, then I can see and sub to all of the folders and they are at the same level as INBOX. Inbox has a /Haschildren flag set.altnamespace=yes should give you same level folders, altnamespace=no should give you nexting.
-Rob
If I set altnamespace=yes, then INBOX gets the /Noinferiors flag, and I am not able to see any of the other folders. ie. I can't subscribe to user/msackett/Sent, which should show up to my client as INBOX.Sent.
