Significance of Folder Setting in Template

Hello,

As I am starting to play around with templates more, I notice when we create a template from an entry using "save as template", it will retain the "folder path" of the original entry in it. However, I don't know if there's any significance to this? Because templates don't show up in the normal navigation tree so they don't appear in the configured folder anyway.

This is what I'm referring to (value is redacted but the circled field is where it shows the full folder path, just like it would for any regular entry - e.g. FolderA\FolderB\FolderC etc.):


However, I notice on the Template Settings page of the settings, there is a "template folder" we can set:


...and the above setting does affect where the template appears on the "Entry Templates" page (since that has its own folder structure). So that part makes sense.

But I'm just trying to understand whether the Folder setting in the General settings page matters at all for templates. The only place I've seen it referenced elsewhere so far is when configuring a host entry, and linking a template to it - when we select a default template, it refers to it by path (again, sorry, I know the path is redacted but the circled box is where it is, and it displays the full path as configured in the template's "Folder" setting):


Any help is appreciated, thanks!

Best regards,