Virtual folders are not real folders in the Content Server. Documents and folders cannot be created in Virtual folders.
Content Server Virtual Folders are supported by Shinydrive. You can think of a virtual folder as a saved search, when you click on the folder it will execute the search and populate the files. Any Virtual Folders created in Content Server will show up as folders in the Shinydrive experience. You can perform all Shinydrive Records Management functions on any displayed documents or folders within Virtual Folders.