People who know nothing about metallurgy spewing "facts" about metallurgy. The folding was to homogenize the steel because the steel/ironmaking process that the Japanese used did not ever liquefy the metal, so the metal had varying degrees of carbon throughout. The ironmaking process produced a bloom, which is like a metal sponge once most of the impurities have flowed away to the bottom of the pile (this did not require as high of a temp). From here, it must be hammered down to make it one solid piece. And in the bloom (the "tamahagane") the metal had zones with more or less carbon, which they sorted out to use in different parts of the blade. Historically, there was the use of blades that were just one type of steel throughout, two types, and also three types, using high carbon, medium, and low carbon or iron layers. And depending on the smith, the location of the layers varied.
By the way, the Europeans also did not liquefy the metal in their ironmaking process, and ALSO had to homogenize and compact the bloom down, and ALSO folded the metal to do so during the medieval period. All that shit about Damascus steel was because the "Damascus" steel (historians think that it is actually from India) was a crucible steel that DID fully liquefy in the making process, creating a steel of high quality and purity, and was fully homogenized.
Also, Japan does have decent supplies of good metal ore. They however choose a relatively non-concentrated ore because it would require less burnable material to achieve a successful smelt. It is an often overlooked cost of metalworking: the fuel. A furnace is a thirsty beast.