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They aren't in a folder, they're in a COLLECTION, which is a completely different thing. Items on the Amazon cloud retain their "membership" of a collection even when they've been deleted from your Kindle.
If you select the "Author" or "Title" view of the Home Page on your Kindle, you won't (I hope!) see the books there. You'll only see them if you view the collection, and that's simply because they are still in the collection, even though they're on the cloud and not your Kindle.
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