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This content applies to all versions since version 4.2.0

To enable the Folders features for one or more communities you should follow the next steps.

Enabling Folders: 1st step

In settings, in the section Basic configuration > Community features will find a new option, called Enable folders. It’ll be disabled by default.

 

After saving the enabling of this option the community owners should go to the specific community where they want to enable Folders. And follow the 2nd step.

Once folders are enabled in the settings, they can be disabled again. The consequences are the same as if in each community the folders are disabled.

 

It is possible to enable Folders without having the check of (Settings > Basic configuration > Tools configuration >) Files enabled. There’s no real argument against doing this because there are no real consequences in the communities.

Enabling Folders: 2nd step

As a community owner, you have to go to any Community settings where you want to enable Folders.

 

If, and only if, a community owner had or has enabled the Files tool (and Folders has been enabled in Settings; 1st step) then Folders can be enabled in the community. If Files is not enabled the Folders toggle will be disabled and will not change when clicked (no message will be displayed).
“Everyone” will be the option by default. This option refers to the creation, renaming, and deletion of folders. So, everyone in the community will be able to create folders.
“Only Owners” is the other option. This option also refers to the creation, renaming, and deletion of folders. So, maybe the situation dictates that only owners create/rename/delete folders, and the members will only see the structure (and don’t have the ‘Create a folder’ option).
If Files has Everyone/Only Owners permission, Folders must have the same. It’s not possible to unlink them.
After Saving, the synchronization will start. (The empty folders previously created in SharePoint will not be visible.)
And in the Files tab of the community, the users will see the folders.

After enabling Folders, the media gallery disappears and the image/video files will appear as any other file, not like a thumbnail. The previously uploaded image/video files will not be visible in the Files tab.
Once Folders is enabled, the order of the files becomes alphabetically, for Folders and for Files. The order will be first folders, second files, both alphabetically.
If the owner, after all, disables Folders, then all files go to the root and the folders are hidden. With Folders disabled, when the users create files and folders, they will be created in the root. If after that, the feature is enabled again, the files and the folders created while the feature was disabled will still be in the root.