What is the difference between namespace and folder in Framework manager
Folder's do not play any part in the full path/unique name of an object, where namespaces do.
You can have a query subject named ABC in 2 different Namespaces, but you can't in 2 different folders that are under the same namespace.
Valid:
Namespace1 --> NamespaceA --> ABC
Namespace1 --> NamespaceB --> ABC
Invalid:
Namespace1 --> FolderA --> ABC
Namespace1 --> FolderB --> ABC
The other nice thing to remember is that folders will not break your reports. they are merely a way to organize your metadata within a namespace. By organizing using namespaces, you risk breaking your reports that are querying against this metadata as it will now look for the namespace name in those query subjects that are moved.