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I recommend using tag for that purpose. It's an easy way that a product belongs to several categories I leave two links that refer to topic Do non-technical/non-web savvy users understand the concept of tags? What is the expected paging behavior of a tree? Greetings.
I would try to prevent the worst case scenario that is performing an action that could cause problems to someone without that person being able to prevent it, so if had to choose just between the options you mentioned I'd choose the first: "disable removing of a folder while it's contents are being edited by another user" There might be some edge case, ...
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