Add folders if you have loads of albums a-z.
Assuming your question is "How to create folders using MP3Tag"
The answer is you can't, MP3Tag can only rename existing folders.
Yes you can.
It's one of the main features of MP3Tag to sort your MP3s in folders and subfolders using tags or part of tags with actions or the convert menue "tag-filename".
Example covert tag-filename:
d:\MP3s$left(%albumartist%,1)\%albumartist%\%album%\%artist% - %title%
Ah yes I stand corrected and thank you for pointing that out, as it is one new thing I have learned today.