Actually it does use this value, but it doesnt kick in in any of the
scenarios you've tried. The team were trying to recreate a behvaiour
found in an application called iFolders if i remember correctly, but it
is thoroughly confusing for 99% of users who don't use it that way. So
its removed in the current release (hardy is about 6 releases behind
now).

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Folder names don't apply
https://bugs.launchpad.net/bugs/230214
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