AssemblyFolders are used during design time in Visual Studio. They are used for automatically adding all assemblies in a specific folder to the ".NET" tab of the "Add Reference" dialog (right-click on "References - Add Reference" in a project), just like the .NET core assemblies.

AssemblyFolders have to be added directly to the registry. They can be located under HKEY_CURRENT_USER or HKEY_LOCAL_MACHINE.

To add an AssemblyFolder you go to SOFTWARE\Microsoft\.NETFramework\AssemblyFolders. Once there, add a new key using a name of your choice. Double-click on the "(Default)" entry and enter a designated folder. That's it!

You can also use the following registry file, but don't forget to replace the <keyName> and the <folder>.