What is the easiest way to work with updating prefabs?

I often do a lot of heavy work involving changes to prefabs with many many parents and children. Working out of the Project view is just not an option. Out of frustration my originally learned process for this is to drag the prefab into the scene, make the changes, delete the prefab and drag the GO back to create it as a new prefab again.

Now this (probably bad) process also seems to involve breaking the prefab instance which is yet another step.

What is the right way to work heavily with a lot of prefabs that need a lot of updates?

AND

Why does the project view only show one level of hierarchy for prefabs? This is the core of the entire problem. If I could just update heavily nested prefabs from the project view this wouldn’t even be a concern. There is no way Unity is totally incapable of fully displaying these.

Not sure what changes you’re making, but if you’re simply modifying components, you just highlight the prefab in the project window and make changes - no need to instantiate it in the scene.

If you’re making more complicated changes, creating child objects etc. you instantiate it in the scene, make your changes and click Apply at the top of the inspector. Don’t create a new prefab!

If you have a lot of prefabs, it’s worth creating a new scene with just one copy of each in the hierarchy. Then load that scene to make any changes and just click Apply.