A subscriber wanted to know if there was a way to password protect the file folders in folder list.

No. You can password the pst file but not folders within a pst.

If you do use a password on the pst, you need to enter when you open Outlook and the contents of the pst will be accessible to anyone as long as Outlook is open. If security is a concern, get in the habit of locking your desktop when you walk away and create separate Windows accounts for each user. (Use the Windows+L key combo to lock the desktop.)