A folder is the visual representation of a directory. A reasonable desktop GUI exposes the underlying files & directories as file icons and directory windows. If your abstraction leaks, that's a bug in your code, not something to beat the other guy up with. It is quite possible to be both a Linux dork and a classic Mac dork.
I started out in the 90's calling them directories and still do for the most part. However, if I'm speaking to the average person I get a strange look when I say directory.
I had a new employee ask me what I meant when I used the word directory. They had never heard 'directory' used in that context. It has only been known as a folder to some people.