When i am trying to remove the underlined folder using the rm command, this is the result that is being shown. What does this mean ??

The $ is unquoted and so it’s interpreted as a if variable name will follow. That does not happen (a literal string follows the $) so it casts an error

You probably are looking for this : rm -r ‘folder’$‘003’

The slash will cause the shell or interpret the next character literally (as as $ and not as variable indicator)