Bob Butler and GatorDeb seem to have this completely sorted out in
Is there a program that will merge prc files and.... The command is:
mobi2mobi filename.prc --title "foldername" --author "book title" --booktype "257" --outfile kindlefilename.prc
The trick is that the folder name is taken from the title field (we knew that), and the title is now taken from the author field.