Explain Like I'm Five

1. Try !learn_programming@programming.dev next time, you'll get downvoted here.
2. Don't put everything in your home directory (I see ~ in the path), create a folder named Projects or something like that, and work there.
3. Try to see if your shell has tab-completion. Type folder<TAB><TAB> (the TAB key twice) and see if your offending folder is selected, that would be easier. Or better, type rm -r folder<TAB><TAB>.
4. Don't put $ or special characters like ? in your names, it's always a bad idea.

Those chars aren't what they seem. The $'\003' is how gnu renders a byte it can't print.

Do

rm -r (printf 'folder\003')

Printf is your friend here.

try rm -rf folder and then press tab to autocomplete the folder name for you

The $ is unquoted and so it's interpreted as a if variable name will follow. That does not happen (a literal string follows the $) so it casts an error

You probably are looking for this : rm -r 'folder'$'003'

The slash will cause the shell or interpret the next character literally (as as $ and not as variable indicator)

@remon@ani.social what would you say in this particular case ??