Bear in mind that the plugin, once activated, basically has no user interface, except for the command to turn a note into a note-folder. It just silently handles renames and moves for notes that are in a folder with the same name.
If you move the note to another folder, the plugin will move the folder alongside the moved note, then move the note back inside the folder. If you use the mode where notes are created alongside the current note, then anything you create while viewing that note will end up in the folder alongside it. If you rename the note, the folder will be renamed to match.
Basically, it just makes this particular workflow work without you needing to think about it or do anything to maintain it.