Sorry… this is going to be verbose…
What you encountered is a result of Scrivener being a robust generalized tool that doesn’t lock/limit users into a single approach to their work.
Here’s my guess at what’s going on behind the scenes in Scrivener and why.
My guess is that all items in the manuscript/draft portion of the binder, even though they take on different appearances and results vary based on those appearances, are the same underlying item type… which just presents different faces (folder, file, notecard, etc. depending on which view you are in) and gets processed differently based on which face it is presenting.
Basically, sort of a single multipurpose building block. I tend to think of it as a chameleon super-molecule that has a bunch of attributes… meaningful visible name, numeric based name in the underlying computer’s operating system’s file system, type it is currently to be presented and processed as, text (its own), synopsis, general metadata, notes, … and optional subordinate items (actually, links to optional subordinate items).
This is supported by the fact that one can change a “folder” to a “file” and vice versa, without losing associated attributes and subordinate items.
So, why display the “folder”'s own text, either by itself or along with the test of the “folder”'s subordinate items? Why not just hide the “folder”'s own text? Because it proves useful, in an open generalized way, to support that.
An example… perhaps a bad one. Chapter title text.
Some folks will create each chapter as a single text file item, containing the entire chapter’s text. Others will create chapters as folder items, containing one or more text file items (scenes?). Others will do other variations, such as chapter folders containing subordinate folders (scenes?) in turn containing text file items (beats/points within scenes?), etc…
For those who do each chapter as a single text file item, they might place the chapter title text at the start/top of that text. (There are probably other ways of generating chapter titles from the outline during the compile process… I have yet to learn those.)
For those who do each chapter as a folder containing subordinate text items, they would have the option of placing the chapter title text in the folder’s own text. At which point there would be something visible there if view only the folder… and also visible at the start/top there if viewed the entire folder and its subordinates’ text contents.
Ditto for scene headers or such, if one uses additional levels of subfolders.
And one can specify various compile behavior for items, based on their level in the folder hierarchy, I believe.
All this also provides robust generalized support both for moving sequentially from outlining to drafting to compiling and also for moving arbitrarily between outlining and drafting and compiling.
Start with a “text” item with a few words or few lines of text while brainstorming and outlining. Then possibly add additional words/lines to that text. At some point, as that chunk of text grows, split that single text item and its text into multiple items. Turn the top item into, or add an additional item at the top as, a folder. Move the all remaining now split out text items into/under the folder item. And you have hierarchical structure. If turns out need additional breakout/detail… repeat this for each of those subordinate text items.
A folder’s own empty text may also prove useful for generating white space. Or not.
Whether or not a given item’s own text appears in the compiled output is controlled, either in the Inspector panel for each item or via checkboxes in the File > Compile dialog.
So, robust deliberately generalized toolkit, which can be a bit confusing and intimidating… but which also let’s you brainstorm/outline/write however works best for you, rather than forcing some particular approach or theory on you.
It does have a learning curve, but as evidenced by its popularity, many find it useful. Frankly, despite some frustrations and limitations (all apps have such), I don’t just find it useful… I find it breathtaking. Within a few minutes of starting to use it, I was somewhat confused and intimidated… but I was also relieved and reassured. I was home!!! Your mileage may vary…
Best I can suggest is just plunge in and keep learning, a bit at a time. It’s not perfect or magic, but it is sweet!