Each folder can have its own permissions, which is set by clicking on the “three dots” icon next to the folder name, and then choosing “Share” from the options menu.
There are 4 different permission options:
Inherit from settings simply inherits the default permissions set from Settings > Permissions.
Share publicly via a link generates a publicly accessible link with view only access.
Share with selected people gives access to only selected people.
Share with selected roles gives access to anyone with a particular role.