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It shouldn't matter if there's a folder associated with it. Changing the file extension doesn't change any of the html code within.
.htm is a legacy extension from when Windows/dos required 8+3 filenames--8 characters and three for the extension. It's functionally identical to .html. (I'm sure if I'm wrong, someone will jump in and correct me.) You get the warning message because you're changing the file extension, and the warning system doesn't have a way to check "are you changing it to something that works exactly like it did before?"
In case of doubt, make a backup copy before changing anything.
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