I agree with @feklee that this is a major problem for those who use Image-Dired. Finding the selected icon is like looking for a needle in a haystack. The solution provided by @Drew helps. My pragmatic solution is to hit RET and then DEL as I look for the thumbnail. The movement allows my eyes to find the right image.
TL;DR: Type C-uk on the subdirectory header line.
Quoth (emacs) Subdirectories in Dired:
Use the ‘l’ command (‘dired-do-redisplay’) to update the
subdirectory’s contents, and use ‘C-u k’ on the subdirectory header line
to remove the subdirectory listing (see Dired Updating). You can
also hide and show inserted subdirectories (see Hiding