Very simple. "All" is a folder that contains the 5 folders (programs, system functions, etc.) Each one of these 5 folders contains shortcuts for the subject at hand. The ones you see blown up are from "Programs". I keep "All" on the desktop for maintenance convenience (when I want to add or delete), but you can put it anywhere.
To make the toolbar from the "All" folder, right click on the Taskbar > Toolbars > new toolbar. Then navigate to your "ALL" folder (or whatever name you give it) and select it.
You can make toolbars of the individual folders too. But that will ultimately crowd your taskbar too much. And the length of the foldername ("All" in this case) will determine the amount of space that will be taken on the Taskbar. So you have an interest to use short names.
Here is a
Video Tutorial that I made on the subject. If you watch it, I am sure it will become clear.