Because External Users had no access rights to the new parent, they cannot have any access rights to a child item. The only way to give External Users access rights to the subfolder is to modify the permissions of the parent folder to give External Users, at a minimum,
View folder
rights.
View folder
rights allow a group to view a folder (and subfolders), but not any files in the folder. It also acts as a lifeline into the folder and its subfolders so that the group may be given enhanced permissions to a child item. For example, if the External Users group was given
Folder view
rights to the
Internal Access Only
folder, users in that group would be able to see that folder and its subfolders; then External Users could be given Add File rights to a subfolder of
Internal Access Only
.