Everyday cutting that has to fit in a pocket: opening parcels and packaging, cutting cordage and tape, food on the move, and the hundred small jobs that come up in a day. The folding blade is what makes it carryable, and carryability is the entire reason the format exists.
Being there. A folder that clips inside a pocket goes everywhere, and a knife you have with you beats a better knife at home every time. Packaging, tape, string, zip ties, food, and light utility work are all firmly in its range.
Three inches or so covers almost all of that. Larger folders trade carryability for capability that most people rarely use.
Prying, batoning, or anything that applies sideways force to the blade. A folder has a pivot and a lock where a fixed blade has continuous steel, and those are the parts that fail. See batoning with a folder.
It is also a poor choice for wet, messy work like field dressing, because material gets into the pivot.
Blade shape first: a drop point for general use, a sheepsfoot or wharncliffe for controlled cuts. Then lock type, then steel.
Folders are the largest part of our Knives category.