Hello David,
Thank you for your feedback. What you are seeing is by design. Just like the navigation pane on the left of a File Explorer window which only displays folders but not individual items in a folder, the Contents pane of the Catalog view only displays containers that you can browse into (e.g. folders, geodatabases, datasets in a geodatabase), but not “leaf” level items that you cannot browse into (e.g. a shapefile in a folder, a feature class in a geodatabase, or a feature class in a dataset of a geodatabase). When you select a container in the Catalog view Contents pane, all of its children will be displayed in the Catalog view (which could include leaf level items as well as sub containers). The containers in the Catalog view Contents pane will have an expander only when they have sub containers that you can expose by clicking the expander. It is designed this way so that you can leverage your experience with the File Explorer, while doing more detailed exploring of the items in your project, e.g. selecting an item in the Catalog view and viewing its metadata in the details panel (assuming that this panel is not hidden).
On the other hand, the Catalog pane displays leaf level items as well as containers. It is meant to give you convenient access to datasets, for example, when you are working with a Map view. If you do happen to want to see more details about a dataset, for example its metadata, you can right click this dataset and click View Metadata in its context menu, which will bring you to a Catalog view with this item selected and its metadata displaying in the details panel.
I hope this helps. Thank you again for your feedback.