I work for a software company and in development there tends to be three types of projects and they get done with this priority.
1. New functionality that can be sold as a new product or will meet a certain sector of the market's required features and thus expand our customer base.
2. Bug fixes - both crucial mandatory fixes and items that make the product more stable.
3. The "nice to haves" - items that are not necessary and don't have a direct connection to sales but make the product better overall.
Folders for the Switch falls into number 3. Which suggests that maybe the team that maintains the system firmware are now looking for something to do. They don't have anything urgent to fix and there probably isn't something planned at a system level that will encourage sales so they're working on the "nice to haves". But they wouldn't have time to do this if they had their heads down on a Switch replacement either, unless that's entirely a different team.