The 'favorites' folder name is case sensitive and up to and including v5.5.0 was 'Favorites'. in v5.5.1+ the app will rename the folder if the old casing is found.
TBX files of aliases placed in the (user-created) folder:
are automatically added to the bottom section of Tinderbox's 'Open Recent…' menu. Items listed there remain in the menu until removed from the Templates folder. This ensures such files are always available whether recently used or not. This is especially useful for those who regularly use a large number of different files.
By placing aliases in this folder rather than the TBX file itself, the TBX can be kept in a more obvious location (such as within the /Documents/ folder hierarchy). A Mac alias can even track the file if moved around the same disk.
The folder can also be used to hold TBX stationary files which effectively act as templates by creating a new copy. Stationery files are a Mac OS features - search the OS Help for "Creating Templates" for further detail.
Note that items opened from this list (except from stationery files) will initially also list in the top section of the "Open Recent" menu listing as they are indeed recently opened files.
TBXs that are set in the OS as stationery files, will open an unsaved copy of the file with an 'untitled' filename.