My worry is still that this design makes the hierarchy a bit less understandable. The default rule is that if something is a parent then it has a handle that you can collapse and a guide line down the side, this would change that. Please try out the 3.5 Preview release:
It’s not quite as nice looking, but I hope solves the basic problem you are having… it’s hard to edit a big focus item. In 3.5 you can double-click a project in the sidebar… when you do that it will “hoist” the project instead of “focus” it. That means you no longer see the project label (not great, but not terrible), but more importantly you no longer see it’s guide line either. And you also can’t un-indent it’s items to no longer be part of the hoisted project.
Anyway please give it a try and let me know your thoughts.