Finding things in Finder · The shortcut left behind
Why does a moved folder still look like a normal folder, with arrows only on the files inside?
Short answer: Some moves — Free Up Space and Data Parking's Relocate — keep the real folder on your Mac and turn only the files inside into shortcuts, so tools that walk your folders see the same layout while the data lives on the drive.
Because some moves keep the folder itself on your Mac and turn only the files inside into shortcuts. Free Up Space works this way, and so does Data Parking's Relocate action.
Keeping the real folder structure means everything that walks through your folders — Finder, Spotlight, backup software, build tools and editors — still sees the same layout and file names, while the data itself sits on your external drive.
It makes no difference to how you use the files: open and save them as usual while the drive is connected. The space is still freed, because the shortcuts are tiny.