TL;DR short pull levers with horizontal-exit cables?
I've put a flat bar on my M stem, and use a full-size O bag, which means that the OEM brake cables get caught on the bag handle when folding the bike because they exit pointing slightly down instead of horizontally.
I've popped some Avid levers on which have solved the folding problem, but they're long pull so braking power is greatly diminished. Commute is pretty flat so it's not the end of world but I'm not filled with confidence when I use them.
I've seen the Paul levers but I'm not spanking that much on levers thanks.