I am quite unsure on how much will screenshots help as I use Czech Windows installation, but lets see:
This first image
shows you, how normal directory library looks like - grouped by source directory.
This second image
shows you my video library after what i've done to it - no grouping. You also can see "Zahrnuje 3 umístění" which means that 3 directories are included there.
Now, the last image
shows up what I achieved when I used sort by "Directory". It is still not the same.
The point is that we can easily get stuck in translating the sort option item list names. But generally I am asking for the grouping option that is defaultly used for directory library.
And sorry for my poor terminology. I am really not used to explain this sort of things in english.