This is what the manual says:
•Removing tracks from a folder
Drag a track out of the folder and release it in the track list to remove it from the folder.
OK, do I stand on my head as I do this? I cannot make this happen try as I might. What am I doing wrong?
Don’t know whats going on there? Maybe have group edit on or have the folder locked?
Thanks Split, but no, the lock is not on. I finally went back to an earlier save and have just begun editing things individually. It’s weird that such a time saver like folder editing wont let me remove my tracks. I must be doing something wrong but I don’t see what. Another thing the folder process does that seems odd is that all my alternate takes of the same kit - which are saved further out in the project - also come under the spell of the folder. This is a deal breaker for me in so many ways.
But I have not done too much group editing so I will stumble through this as best as I can. I might find a way to edit in the folder and then remove the tracks eventually…or not.
The blessing here is that Cubase’s quantasize feature is working really well. It’s a blessing to have this for these drum tracks - as is the GJ mic’ing method for that matter. 
Ah 
Maybe try making a new track within the folder, drag the part to that and then move the track out the folder?
OK, I see the logic in this and actually I did this at the start. I recorded the tracks in the project window, created a folder, ‘moved’ the tracks into the folder and then began the group editing.
I did figure out a way to remove the tracks. In the far left column of the project, in the area that displays the vertical selected track info, channel, inserts, sends, etc., the various tracks are displayed in vertical fashion as you click on the grouped tracks in the project window. These I assumed, were the track icons I could drag out of the folder but could not. OK, above these sub-icons is the main folder icon indicating the ‘folder channel’. If you click on the actual folder icon the various tracks will display once again in the project window. From here it seems you could work in unison with the folder tracks or not, but I elected to remove the folder channel which left the original tracks once again in the project window, now modded by group editing, BTW, and get on with what I needed to do.
Now, none of this is written in the manual - that I can find - so hail the stumbler in this case. Split, thanks for checking in here.