I keep finding them around the Wasteland, but have yet to find a purpose for them. Are they a red herring item, or do they have some use?
Folders actually do have one function - they have a weight of 0 but can be sold for 1 cap each, so there's no drawback to picking them up other than the time spent doing so.
They have no known use. They can't even be scrapped for materials.
Arguably they could be used for "decorating," or collected to see how many you find (and so on), but serve no in-game function - the same as burnt magazines, burnt books and some other miscellaneous items I can't think of off the top of my head.
Because of their lack of use anywhere else, and their lack of weight as well, they are the perfect ammunition for the Junk Jet, alongside the Pre-war cash stacks
Straight from the fallout wiki:
"A plain, empty manila folder used for organizing papers. They weigh nothing and can be sold for a single cap, but otherwise have no practical purpose in-game.
There is no reason not to pick up Folders, they are equally as valuable as caps."
Contrary to belief of folders being useless, they can sell for 1 cap each which in my personal case has helped me a lot in collecting the caps needed for some items or even to build shops in settlements since these need caps to buid them