[Modern Sites] Search within Document Library should search recursively
When a users search from a Document Library only the current level will be search. This should include documents from the subfolder too, or the ability to search down the tree.
Modern Search in Document Library cannot handle large libraries (Over 5000 items). Due to this, the results may not come back from folders that are deeper.
Microsoft Please fix Search for large libraries in Modern. The User experience is pretty bad when you call something "Modern Search" and it cannot handle a library that is larger than 5000 items.
Joran Markx commented
Yes, now only the current level (not the underlying folders) are searched. Pretty useless in my opinion.