Sounds like the file association got set incorrectly. Luckily it can be easily corrected. This site below has a full list of a great many common file associations: Restore Default File Type Associations
Go to that page and find both "Directory" and "Folder" in the list. Download and run those and it should fix your ability to open folders. You may need to do the same for your "LNK" files, which is also in that list.