It is not applied to the folder (currently) because BDMV stacks to a file. It's basically the same for VIDEO_TS items. This is directly related to http://trac.xbmc.org/ticket/5826 which will be addressed after Dharma.
Always read the online manual(wiki), FAQ(wiki) and search the forum before posting. Do not PM or e-mail Team-Kodi members directly asking for support. Read/follow the forum rules(wiki).
Please read the pages on troubleshooting(wiki) and bug reporting(wiki) before reporting issues.