The images aren't coming through. You need to upload them to some service where you can then get a public link to them.
That said, in your example, it is correct. If you are monitoring FOLDER 1, then the files at the destination will be at the top level. If you want the destination files under FOLDER 1, you need to either (a) monitor the folder that contains FOLDER 1 or (b) create FOLDER 1 at the destination and use that as the destination of the move.