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I agree that "Library" isn't really the right word. i can see where they're coming from, though.

I'd rather see a "Planning view" structure of:

Inbox
Projects
Single actions

with both single actions and projects being able to be grouped into folders. Perhaps some clever coding could allow folders with the same name in the single actions and projects categories to be optionally linked, so when you focus on one folder you see both the projects and singletons associated with it.

Alternatively, we could go back to the way it was, which seemed fine to me (even though I'm in the "groups of single actions aren't projects" camp). :)