Requested feature:

It may just not be possible to do what i want, but is there some way to make it use only the 'folder.jpgs' of the subfolders to create the icon for the master folder?

One subfolder may contain not just a folder.jpg but also scans of an entire cd booklet, in which case the 'Classic' preset just selects any of those jpgs to create the master icon, rather than selecting the subfolder icons/folder.jpgs only.

Ah, right. No I'm afraid there isn't the ability to do a classic-style icon but only use cover art as the image source. At the time I created the original script-based version of AFI years ago the distinction between "cover art mode" and "photos mode" made sense but I should perhaps look into unifying it - one should more logically be able to choose the "mode" of generation independently of the filename search used to find images.

Step-by-step guide to setting up automatic folder icon generation?

A Mac App Store reviewer writes:

Perí – Mar 14, 2017
My original jpg file is 1000 x 814 pixels. It weighs 70 Ko. But the created icon weight is 900 Ko. I am quite sure that the ICON format is not compressed but I would appreciate that Add Folder Icon would down sample the model.

This is a good point; retina icons reach 1024x1024 pixels, but how often do people set their Finder to display such large icons? I've written in response:

That's quite unfortunate - yes, as you guessed, the icon format the Finder requires is not compressed. We also have to make icons all the way up to 1024x1024 pixels in the era of high density Retina-display images, which can lead to some pretty big files.

I've added a feature request to the issue tracker for Add Folder Icons which suggests a user-selectable option to reduce large size icon quality as a trade off for smaller icon file sizes. Very few people have their Finder icons set to very large sizes, so for many users this could represent quite a big saving on disc space and have no visual impact.

This issue tracks the request.

As always seems to be the case, the newer the OS, the more bugs it has, with old, still-unfixed bugs getting worse. AFI no longer works with any icon size apart from maximum; attempting to use smaller icons results in very heavily corrupted Finder displays. Of course, failing to supply smaller icons has significant performance penalties within the Finder, but it seems one has no choice.

This can cause a disparity between the no-icon or with-icon rendering if the Finder window background is an unusual colour.

A Mac App Store reviewer writes:

by Eugene – Feb 17, 2018
Wish it could make previews not only for photos, but also for videos, pdf, documets, etc. As it was made in Windows Explorer.

In newer OS X versions with faster machines and SSDs quite common, this becomes viable on large folder sets. Consider this addition (via delegation to the QuickLook generator for each thumbnail?) - probably related to #1 if overhauling the generator, as it'd make sense to have extended filetype selection implemented as an additional generator option.

Hi. Thanks a lot for app.
Is it possible to improve application and make it automatically create new folder icons without doing this manually each time?