When you want to delete a media folder, consider how you want to handle the items it contains. If that media folder holds media assets, you need to delete the child media assets first, or move them to a different media folder. Deleting a media folder that contains child folders moves the child folders to the top-level of the Media view hierarchy.
Consider a structure that includes an Images Folder containing a navigation bar image as well as a media folder called Logos Folder that holds other images and media folders:
Images Folder
Nav.jpg
Logos Folder
logoSmall.jpg
logoLarge.jpg
Old Logos Folder
To delete the Images Folder and Nav.jpg, you should first delete Nav.jpg, then the Images Folder. Once you delete the folder, the Logos Folder will be moved to the top level hierarchy, retaining the hierarchy of images and media folders inside it.
