I have experience exactly in this kind of extension. As a matter of fact, I've already donde what you ask for, that´s why my offer is the lowest and also my completion time.
My extension shows "Other Bookmark" subfolders and the quantity of bookmarks inside of each one. When you click on a subfolder, the Bookmark Bar is cleared and loaded with the content inside the selected subfolder.
I think this is what you need. I can show you the solution and code as soon as you want.