Actually, {{TOC}} is something different – it’s just the standard multimarkdown way of building an ‘in-document’ static table of contents.
I’m talking about DT3’s dyname table of contents features. This doesn’t need {{TOC}}. Instead it scans the document and builds a clickable table of content based on your heading, even if {{TOC}} isn’t present.
As you can see, I’ve clicked on Heading 2.1 in the table of contents page and it’s moved to the correct point in both the text and the preview.
If you want actual folding text, I think you need to change the CSS and possibly use javascript as well. I’m not in a position to find it as this moment, but I’m fairly sure I’ve seen a post from one of the experts (@Bluefrog, perhaps) showing how this can be done. It’s beyond my level of skill, though…
HTH.