Actually it gets even stranger…
When I have a full "page" (or pages) of hidden folders and non-hidden folders following them, I get a pane with the flash "Drag and Drop Files Here" thing, and pagination controls indicating the total number (including hidden folders). Go to the next page, there's my visible folder!
So you get empty pages where the hidden folders are, and then the visible node on a later page – where it would be if all the other nodes were NOT hidden.
They're either hidden, or they're not hidden. They should act like they don't exist to the UI and/or to the user. Not be counted in the lists, but then not displayed.
I'm sure with a little script to create 60-100 folders with the sys:hidden aspect, then add one or two folders and name them starting with "z" or something. This bug should be clear-as-day.