This means that you can categorise your menu elements for your website visitors.
Creating a submenu is very simple:
1.) Click on "Menu" => "Create submenu".
2.) At "Menu" => "Manage menu elements", you can move the menu items into a submenu by clicking on the arrows to the right of the menu item.
This means only you can see folders, they are not publicly visible on your website (in contrast to submenus). Folders are for example useful to categorize your pages into different topics.
Craeting folders is also really easy:
1.) Click on "Pages" => "Create folder".
Manage folders: To delete a folder, change the title of a folder or edit the pages in the folder, click the appropriate location of the folder symbol.
2.) At "Pages" => "Manage pages" you can move the pages into your newly created folder by clicking on the arrows on the right of the page.