No, I think you have it correctly. The “forum list” provides a list of the main forums, their sub forums, and, in brackets, the number of topics each sub forum contains (but not their names). I also did a bit of experimenting and found that if I create another sub-forum one level further down, it doesn’t show up at the upper level. This may be a function of the WordPress Forum module, but I agree with you that a proper tree structure would be much more preferable.
I’ll do some checking and get back to you on this. Thanks for pointing it out!
Don