Someone may correct me but what it means is there is no "edit" undo selection available. If you need to undo a move function of files then you have to create another move. (does that make sense to you).
If you wish to remove a folder from within Lightroom the folder needs to be empty i.e. no files then you can select the folder and use the - (minus) sign at the top of the folder structure.
see the screen shot below.
Thanks for the reply. I'm not sure I asked the question clearly enough. I mean, when I move a folder with images in it to a folder that has other folders with images, as in your screen shot of the folder My Pictures, will I be able to remove that folder with images in it from the folder that I had earlier dragged it into?
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Yes, the warning is just saying that Ctrl(Command)+Z will not undo. There is nothing to prevent you from moving the folder a second time, even to the previous location.
Sorry I have never tried that function so I am not sure if you can drag the entire folder elswere and if it will still remain in the catalog. Maybe someone else can make a comment.
Yes, it will remain in the catalog. In fact if you are going to move files or folders around this is the way to do it so that Lightroom does keep track of where they are going. If you were to move a folder using your Windows Explorer and then you opened Lightroom it would show the folder in the position it had been in the Lightroom catalogue but it would be greyed out and would say something like that folder is "off line" or not on the disk. So it is best to move files or folders within Lightroom. Also, to make sure you understood the other answers I think an example might help: You have a folder called Family and within that folder is one called In-Laws. Then you decide you want to move the In-laws folder out of the Family Folder into your general Pictures folder. You click on it and start to move it and get the message that once done the move can't be undone. Go ahead and move it. Lightroom will track the move and know where the folder and its contents are. Then the next day you decide indeed you want to move the In-Laws back into the Family. First, please make up your mind -- are they family or not?! But OK go ahead and move the folder back to the Family file -- and again you will get the message that the move can't be undone. But again, Lightroom will obediently track the move in its database and your folder and files will be where you put them. The point is that each move of a folder or file is a separate action that Lightroom will track, but it doesn't really care where or how many times you move it. How your In-laws feel when they find out is another question beyond the purview of this forum.