let us change root folder from "Create New" menu

The first time you save a new document, you have the option to create a new folder for it, if needed.

I'm very confused by your post. 

1. Your hosting server has only ONE root folder.    Most hosting providers use public_html/ or htdocs/ or www/ however this varies by hosting plan.

2. Let's say you have more than one domain name. Example1.com, Example.com, Example3.com.  You need one site definiition for each domain.  Once each site is defined, you may easily access whichever site you want from the drop list in your Files Panel (F8).  See screenshot.

To define a site, go to Site > New Site...  Give it a name and create a folder on your local hard drive.  C:\MyTestSite.

To enter your server's S/FTP settings, click on the SERVERS tab.  Use the settings your hosting provider gave you.

Repeat for other domains.

In fact, you get the new root folder, when you define a new website, not when you create a new document.

• https://helpx.adobe.com/dreamweaver/how-to/define-a-dreamweaver-site.html
• https://helpx.adobe.com/dreamweaver/how-to/make-website-pt1-site-setup.html

I can't think of a use case where one need to define a new root folder, when creating a new document ?

In general, when declaring a new site, there are some options that are often necessary to define, like the type of server, the evaluation server, enable/disable the preprocessor...

In which case do you need to define a new root folder, when creating a new document?