Folders cannot be renamed from the Navigation pane. The only way to rename a folder is to change the name of the folder in the Finder, add the files again to Fire, and then remove the old files from the old folder (in navigation pane) one at a time before finally removing the old folder reference.
Known issue, i’m afraid. non-Virtual Folders containing files can’t be renamed yet (empty ones can). i’m long overdue to look at fixing that, so i’ll try to do that as one of my next tasks.