You are right, this makes sense. Trying to name the subfolder page's slug index gives you the error that is not possible to do so as there is an index page in the root folder? This sounds more like a bug to me.
In Webflow... the first page you create - (and you can reassign it)... is your Home Page.
Webflow creates this page as "index.html". (using your example)
/las-vegas-nv/index.html... index.html page is your Home Page. Webflow creates it for you.
Webflow also allows you to create Folders off the root directory. (using your example) /las-vegas-nv/dean-martin-showroom/
In the above situation... if I were to visit the folder /las-vegas-nv/dean-martin-showroom/ - I would see a directory listing or a server denied error.
What I need is the ability to "set-a-home-page" in my folder.
Webflow would create an index.html file for whatever page I select as the Home Page.
In the above situation... if I were to visit the folder /las-vegas-nv/dean-martin-showroom/ - Webflow would create /las-vegas/index.html... - where index.html is actually the dean-martin-showroom page (in the designer)
My problem is... Webflow will not allow me to create a page / slug named index.
This would fix my problem. Allow me to set any (one) page in a folder - as a Home Page... - and have Webflow create that selected page as index.html... just like it already does in the root folder.
I know what I am asking for "is do-able"... "is easy"... and "makes sense".
What I don't know and don't understand is - the "security issue" that Webflow has mentioned a couple times in the past.
If the community were told "what-this-security-issue-is"... - we might better understand and agree with the reasoning or - we might be able to blow it out of the water with a valid response.
(and on a side [UNRELATED] note... please allow linking / jumping across pages via an ID... for example: from my-portfolio.html... the user can click a link that takes them to index.html#contact-me)