For inventories that group VMs in per-host folders: the folder of the source VM or template has the name of
the host it is on as one element of its path. That element is replaced by the name of the host chosen for the
clone, so a clone from a template on virt5x that is placed on virt4x goes to the
same folder under virt4x. Short and fully qualified host names are matched alike, and the
replacement uses the form the folder has.
If the source's folder path does not mention its host, or the folder for the chosen host does not exist, the source's own folder is used, as without this option, and a message about it is logged. A folder that is given explicitly always wins.
"Inherit" (the default) uses the setting of the vSphere cloud this belongs to; "Yes" or "No" overrides it for this one only.