Deleting a Folder
The Delete action for a folder moves all of its test cases to the 'All Test Cases' filter. In other words, it deletes the folder, but not the test cases within it. If you want to archive each test case within a folder you want to delete, refer to Archiving a Test Case.
To delete a folder:
On the left sidebar pane of the Test Cases screen, click the folder name, then on the right pane, to the right of the folder name, click the Edit folder button.
On the Edit Folder dialog box, click the red Delete folder link near the bottom left.
Click the Yes, Delete Folder button when prompted to confirm.