Thanks for reply! Folder filtering is not a feature of the Indexer, only the options listed in the below document link are supported: https://learn.microsoft.com/en-us/azure/search/search-howto-index-sharepoint-online
If you needs to be able to filter on specific folders, perhaps you can add a custom column as part of the documents in SharePoint on creation (with an automated workflow or similar) and then after indexing, filter (https://learn.microsoft.com/en-us/azure/search/search-filters) that column when querying for documents, so only the ones that are under a specific folder are returned.