Yes, I think that someone on the design team equated folders with Desktop, and since Desktop is on the way out, then so must be folders!It is what it is for now and MS seems to be avoiding folders for whatever reason
Seriously, this has to be addressed because it is not a Desktop issue; it is an organization issue. Specifically with IE, you should see my Favorites folder structure; I have all my sites neatly and systematically organized. There are some Favorites that I infrequently use, so I couldn't even tell you the site name, but I know where to look in my Favorites folder structure to find them.
How can I do that with the Modern UI IE? Scroll through the ridiculously long list all my Favorites? And I don't know how that list is sorted, but it certainly isn't even alphabetical, though it appears so at first.
They can call it something else that is consistent with the Modern UI, but please implement folder functionality.