It is possible to fold threads - that is, visually collapse threads into a single line (and the reverse), by default using the TAB and S-TAB bindings. Note that the collapsing is always for threads as a whole, not for sub-threads.
Folding stops at the first unread message, unless you set
mu4e-thread-fold-unread. Similarly, when a thread has marked messages,
the folding stops at the first marked message. Marking folded messages is not
allowed as it is too error-prone.
Thread-mode functionality is only available with mu4e-search-threads
enabled; this triggers a minor mode mu4e-thread-mode in the headers-view.
For now, this functionality is not available in the message view, due to the
conflicting key bindings.
If you want to automatically fold all threads after a query, you can use a hook:
(add-hook 'mu4e-thread-mode-hook #'mu4e-thread-fold-apply-all)
By default, single-child threads are not collapsed, since it would result
in replacing a single line with the collapsed one. However, if, for consistency,
you also want to fold those, you can use mu4e-thread-fold-single-children.