Folders are used for a hierarchical structure, which is ideal for file system organization and easy navigation. They reflect the physical storage locations of photos.
Albums, on the other hand, are virtual collections that can group photos from different folders based on themes or events without changing their physical locations.
The decision to work with Folders vs. Albums depends on where you are in your workflow. Folders are the first level of organization and determine the physical location where you store your image files. Albums are the second (third, etc.) level, allowing you to group your photos by subject, event, task, and more.