Is there a way to make Finder always expand to "Show All" by default in "Icon View"?

I have a two-part answer for you. The short answer is no, you cannot "Show All" by default in the Icon view you are using.

The good news, and second part of the answer, is that you can change the folder View settings to eliminate this completely.

1. Open one of the folders with which you are having an issue.
2. Select Show View Options from the View menu.
3. Change the Arranged By setting to Name or None.
4. Then Select Sort By to whatever way you prefer. Kind will be the secondary arrangement.
5. You may also wish to check the box, Always open in Icon view.

Once this is set the way you wish, you can also click the Use as Default button at the bottom of the View options window.