Log.appendfolder - is creating child folder

That's what appendfolder does... it creates a sub folder within the log folder that you are currently in.

What are you trying to do with appendfolder that is not working as expected?

https://support.smartbear.com/testcomplete/docs/reference/project-objects/test-log/log/appendfolder.html

I quote:

The AppendFolder method creates a new folder in the test log and activates it. Once activated, TestComplete can send all posted messages to this folder. The folder can hold messages of different types (they are posted by the Log.Error, Log.Warning, Log.Message, Log.Event, Log.Picture, Log.File and Log.Link methods) as well as other folders.

If you want a new folder but not on the child level, take a look at this:

https://support.smartbear.com/testcomplete/docs/keyword-testing/reference/logging/pop-folder.html