Use that at your own peril, of course. It's the wrong place for user added LUTs, but go ahead!
Add any LUTs to that, and you change what LUTs are used on any previous selection if any LUT you add will sort to a 'higher' (earlier) place in alpha-numeric sorting.
Say you apply "AlphablueCheese" to a clip.
Now, you add a LUT called "A 1" to the folder.
Go back to that sequence. A different LUT is now applied, as what you did changed the sort order.
Besides, if you work with Ae or send an export to MediaEncoder, the LUT you applied won't get used either place.
That's why it's important to use the correct locations, as specified, for USER added LUTs.