From Carleton Moodle Docs
A folder allows a teacher to display several course resources together. The resources may be of different types and they may be uploaded in one go, as a zipped folder which is then unzipped, or they may be added one at a time to an empty folder on the course page.
Using a folder to display resources is neater than displaying files one by one in a list. It takes up less space on the course page. (However, the folder settings allow for the files to be displayed on the course page if required.)
An optional setting allows the teacher to show a download button in the folder so students may download the files as a zipped folder for viewing offline.