This is somewhat complicated process so I would have somebody to write the exact steps here (or wiki). I just got it to work but I am not confident it will succeed next time.
Basically:
in preferences:
add own column Collections, lookup name collections
plugins - KoboTouchExtended: The Kobo from firmware....: type #collections
(I have selected create bookshelves, I do not know if this does anything)
This setup SHOULD push handmade column "Collections" to Kobo collections.
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