As Node-RED continues to mature there is a tendency for the palette list to grow.
As such, I think there are a couple of small usability improvements that might help people.
Use browser localStorage to retain the current collapse/expand state of the palette.
Use browser localStorage to retain the current filter state
These ensure that, if you close the Editor and come back another time or reload the Editor page, that the current collapse and filter states are retained. Particularly useful if a node you use a lot is towards the end of the list.
If I am perfectly honest, I cannot remember the last time I even used the side bar palette instead opting to ctrl+click then start typing. But I do see the value for those who are more mouse drag+drop users - I personally would not block a PR if someone wants to contribute this.
I was perhaps not clear with my suggestion. i would personally have a localstorage key named "palette" or "palette-state" and it would store a JSON representation of { "filter": "", "collapsed": [] }