Is there a way to make Finder always expand to "Show All" by default in "Icon View"?
I am referring to this situation where the "Show All" is collapsed by default:
I have a two-part answer for you. The short answer is no, you cannot "Show All" by default in the Icon view you are using.
The good news, and second part of the answer, is that you can change the folder View settings to eliminate this completely.
Once this is set the way you wish, you can also click the Use as Default button at the bottom of the View options window.
On closer inspection this appears to be a bug. If you populate a folder with only sub-folders (no other file types) then the 'show all' remains the default when you leave and re-enter the folder. Also, I mysteriously have one folder on my mac with multiple file types where the 'show all' option appears to be the default. Definitely a bug.