@Tollefson, Kevin Thanks for reaching out. Make sure that you have Include Nested Items property to Yes and not as No so the nested element is returned. By default, the value will be Yes (true). Can you also confirm if you have set any other property in your action? I will also suggest you to navigate to your folder that you have specify and validate if there are any files in the nested folder. I had the tested same at my end and didn't observe any issue.
You can see with the below configuration it returns the nested folder files i.e. New Text Document.txt as below.

Let me know if you need any assistance in validating.
Please "Accept Answer" if the answer is helpful so that it can help others in the community.