This feature helps you if you upload a document to the wrong folder. Or if you wish to use a folder to simply collect documents from clients.
Multiple folders for the same company
Sometimes it makes sense to create multiple folders for one company. You can then sort your documents based on locations or by departments. It can happen that you upload some documents to the wrong folder. Now it is easy to move "ready" documents to another folder.
Collecting documents from clients
Sometimes you don't want your client to mess up his books. Just share a folder that is not connected to Xero with your client. After the client uploads his documents, move the documents to the folder where you want to process the documents into Xero.