Select by folder.
Use this option to select all items where container folder is the same as you check.
Disabled folders are displayed just to show all different paths. If a folder to select is disabled, means it can't be checked because is out of Source or Target folders criteria.
You have this results:
If you right-click on file Icon_10.ico and choose the option , this dialog is displayed:
If you check the folder C:\tmp\\reshack - Copy\shell32, then only files on this folder are selected after you press Select button (disabled until you choose at least one folder).
Clear previous selection: check this to clear all previously selected items on results. If you want to keep previously selected items, uncheck this option.
Select: apply selection
Close: cancel this dialog, nothing is selected.