Local folder deletions are not being picked up if the folder has files in it. The file deletions are captured however the folder deletion is not. A folder moved event is captured.
However if the folder is empty the deletion will be audited by Change Auditor. Remote deletions of folders are recorded regardless if the folder is empty or not.
Defect ID 6996 has been raised for the issue and will be considered for a future release of Change Auditor.