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I think you'll find the inconvenience of having on-hold projects in the list rapidly vanishes when you start using the quick match feature instead of scrolling through the list in the usual fashion. Just type a few letters (first letter of each word in the project name is often a good choice) and the list shrinks with each letter typed to just the projects (or contexts) which match against those letters. The matching letters don't have to be contiguous, just in the order in which they appear across the name. I find that I can cut the list down to the point where my target is in the top few choices with only 3 or 4 keystrokes, even though I've got some 900 projects in my database (152 on hold, so I have real-life exposure to this issue!) Scrolling through the list is rather inconvenient but the quick match works so well that I don't even have to keep my sidebar in any sort of convenient order for searching.