It sure is e.g.
For customary ripper pathnaming: %artist%\%album%$num(%track%,2) %title%
To collect scattered album files into a compilation: compilation$num(%_counter%,2) %title% but take care to copy the files first since this is a move not a copy!
Florian, I think Mp3tag is unduly shy about this great feature! When I started with Mp3tag I assumed that Filename meant Filename and with no clue that '' was allowed, I had no idea that it operated on folders too... until you told me [Edit: FTR, Help now says "You can use the backslash to mark directories in the format string."]
How about the Help's list of format string elements be updated to include '' '.' and '..'? How about Help has an example of folder rename? Perhaps the command should even be remaned to Tag - Pathname.
PS One tiny flaw that would be good to fix is that Undo fails to undo the creation of directories that it empties. One might also want an option for Convert to delete directories it empties.