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Noo... the stock software also stores books in folders, either on the internal storage or the external card.
The metadata (titles / chapter info for ePubs) is also stored in a database. This database is then used to store what Kobo call Collections; ie a book can be in any number of collections.
However, when an external card is removed from the device, the book records are removed from the database. I'm not sure but I think that includes Collection data. On reinserting the external card the books are reprocessed, however I doubt that the Collections are recreated.
I'm also not sure if the Touch supports 32Gb uSD cards.
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