If you’ve setup a folder that allows listing of the directory index, you will be presented with that directories contents. Folders and files will be show and you can navigate through each folder. However, if you’ve password protected a sub directory, it will not show up in the listing. This is because its considered to be protected and the user should not be able to access it.
To override this option you must place the following into your root .htaccess file, not the one protecting the folder.