I can see from the code that there is a limit to the size of the virtual sql stored for a group at 500 bytes, so that's surely the problem you are hitting...
Easy for me to extend that for new databases.. now let me see how to fix this for existing databases..

Can I confirm something?

Testing it here I see that the grid row size is too small when the "Grid Row Height" number is set to 0 as it is by default, and I will try to fix that.
But I am able to manually set a custom "Grid Row Height" that seems to make the grid look correct with whatever font size I choose.

Can you confirm that, or take a screenshot to show me what the problem is?

And what does it look like if you increase row height to say 48?

Not seen this particular CHS behaviour before - looks like an odd episodic non-fatal bug or something.
I was editing several separate clips today, when I kicked myself for making a mistake: I had just pasted a text string, replacing the existing text, into the beginning of a clip's Title field in the Menu pane, and then started typing some more text after that, and then noticed that, instead of typing the new text after the end of the string I had just pasted, I was actually typing it in immediately before the beginning of that string.
The cursor was a blue colour (normally is black).

After correcting the situation, I thought "How did I make that silly mistake?"
So I repeated what I had just done:

1. COPY some text from within a clip.
2. Mouse select the text in that same clip's Title field that I wanted to replace.
3. PASTE.

- at which point, I noticed that the cursor - which should have been black and at the end of the string just pasted - was in fact now blue and positioned immediately before the first character of the string I had just pasted..

I repeated this with three other clips, and it was consistently repeatable for each.
However, after re-sorting and working with CHS (was busy saving clips) for about half an hour (without any intervening restart), it was no longer repeatable, and the colour of the cursor was restored to its usual black (not blue). I had not noticed the point at which it changed.

EDIT 2017-03-19 0008hrs: As an afterthought, I wondered whether this might have something to do with the cursor in CHS being different (thicker) when editing inside the Title field in the Memo pane, whereas it is a thin line when editing inside the clip text.

@mouser: Thanks. I have downloaded it - CHS v2.42.0 April 20, 2017 (Beta) portable - and the SQL generation for the Virtual Folder works just fine now you have increased the field's max size limit. (What is the limit now, by the way?)
I saw there were only two files you had changed - the .EXE and the Help file.

This may be a stupid question, but can you elaborate on what is wrong with the way it looks?  And can you give me a screenshot of your Custom Appearance tab?

Ok so there are a couple of things to nail down.

The "faded" dim look is, I think, the *normal* way CHS looks if you have selected the ALL group.  It's shows the grid rows as dimmed when the items are not within the group itself but instead in a child group.

Can you confirm that by unchecking the customize checkboxes on the Custom Appearance tab?

If so, do I then understand that your problem is that sometimes CHS is ignoring your Custom Appearance options?

When this happens is it ignoring ALL of your custom appearance options? Or only the one that effects "dimming"?

Does the problem only manifest itself on startup? or randomly in the middle of using it?

Before taking this further let me confirm that, as usual, I am the problem.

Based on your description of the symptoms, I'm not sure yet.  Let me know if you think it might be something CHS is doing wrong.  It may still be that CHS is not applying reliably your settings when it starts?

Mine is also like this....  Mostly. 

As I said before, it's by design that clips are dimmed when they are in a child group of the one you have selected.
If you don't like this behavior you have two choices, you can either disable the displaying of child group contents when viewing a group, or you can disable the differential coloring option which is on the bottom of the "Spellcheck and Display tab" and labeled as "Color Rows Based on Group Owner".

Let me know if you think it might be something CHS is doing wrong.

Nope, it's all down to me - again

For a recent beta I'd expunged existing copies of CH+S and hadn't properly restored the settings when I installed the new version.