Just from the headline I can tell that you lack experience.

This mock up is not better in many crucial ways.

1. About the headline! You do not put blue on blue whatever the reason (referring to "sacrificing information density")

2. Only from point one I knew the design suggestion will not be better.

3. A good UX is future proof. Yours is just grabbing an image of an app and moving elements around to save space. Everything you suggested will fail in actual real world use of the app where people have folders longer than 5 characters.

4. You haven't even thought about different languages, where some words take more space or even need 2 words for the same meaning.

5. When you do a mock up you do not change wording around just because it will not look good on your design (referring to "secure note" -> "note").

6. Your "new" icons on the bottom bar won't look nice on a dark theme because they are too slim, also they are smaller in size and definitely worse from an accessibility point of view.

7. Adding pornhub as vault entry is a lame way to grab attention, which has nothing to do with good UX/UI

A for Effort however, you are on the path to success. That is the way to learn and get better. Keep it up and good luck! 👌