New
#11
That your flash drive is such an old device puts everything in proper perspective.The memory technology and controllers used in the first generation flash drives is not the same as that used today. As with everything, technology has evolved over a period time and soon we forget the past.
The first generation flash drives may not have the same "wear levelling" process that is present in the present day drives. So it is quite possible that certain memory has "worn" more than the rest becoming unreadable ( readability below threshold level). That cannot happen in the present day flash drives. Once the drive controller detects something is amiss, it shuts down the whole drive making it unusable for further data storage. ( If you say folders lost, we can only think of fake drives where it happens today :))
So your conjecture that certain portions of the drive could have gone bad may be right. Linux in many cases can read what Windows cannot read. So you may still try to recover that "lost data" with a live Linux.
My post #8 here on creating a Live Linux flash drive : Is there any way of saving a completely unrecognisable hard drive? It will also take you to Lucid Puppy way to recover files from a non-bootable computer. In your case it is your unreadable (in parts) flash drive.