@Ivanwah it can be done. It's just not easy to figure out how

.
I'll demonstrate with the Menda-Circle icon set:
1) Know which icon set you're using (Menda-Circle in this case): Settings > Appearance > Icons
2) Open Thunar Root: "pkexec thunar"
3) Go to your icon installation: "/usr/share/icons/Menda-Circle"
4) With Menda-Circle, go to the following sub-directory: "places" > "/usr/share/icons/Menda-Circle/places"
5) Name your custom folder icon: "inode-directory.<extension>". E.g. inode-directory.svg
6) Copy your icon to
both 'scalable' and 'small' sub-directories: "/usr/share/icons/Menda-Circle/places/scalable" and "/usr/share/icons/Menda-Circle/places/small"
6.5) If you have a small and large/scalable icon then copy them respectively
7) Close all Thunar windows, and re-open Thunar
NOTE: If you delete your custom folder icon, I've found easier to re-install the icon set (via package manager) as Thunar reverts back to it's default folder icon.
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Source:
https://urukrama.wordpress.com/2014/12/10/why-doesnt-thunar-use-your-icon-themes-folder-icons/Backup:
https://archive.is/AMar5