This does not appear to work on some devices (of course after posting this I must have got some sort of update or a service installed because its now working as intended)
Creating a folder
1 On the Classic Home screen, tap and hold an app, and then drag it to Create folder that
appears at the top of the screen.
2 Enter a folder name.
3 Tap , select the apps to move to the folder, and then tap Done.
Instead you have to do it from the Apps Drawer.
Tap the 3 dots in the top-right corner to get this menu then when you have created the folder, long press it to add it to your Home.
If your rooted than use
: Navigate to folder/file or make a new folder/file
: now long hold on the folder/file you created and near the bottom of the menu you will see "create shortcut" and tap it.
: now back out to your home screen and you should see the folder/file
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