Move Dropbox folder into a vault

WIN 10, Cryptomator 1.4.5, Dropbox 47.4.83

Just in the process to configure a new WIN 10 machine. Installed Dropbox client and wanted to move the dropbox folder into an existing vault (decrypted). I get the error message:
File system is not supported when I want to move it into the network folder. But I could move the dropbox folder to the physical path of the Vault. e.g D:\Userdata\name\Crypto\DocsandFrogs
So I have at least two questions:
First: What is the difference between copying the dropbox folder to the network folder and copying it to the physical path of the vault.
Second: When I move the dropbox folder to the direct path of the vault (here D:\Userdata\name\Crypto\DocsandFrogs are the files there encrypted too and if yes into which folder of the direct path do I have to move the dropbox folder? Is it the folder with the vault name (here DocsandFrogs) or one of the subfolder - d or m?
Thanks for any useful information to my question

Let’s answer the most important part of the question first, to avoid any misconceptions:

No. Your data doesn’t get encrypted if you move it to the vault’s storage locaction.

It only gets encrypted when added to the virtual drive (which technically appears as a network drive if you’re using WebDAV).

Now here is another potential misunderstanding:

You can not move your whole dropbox directory into a vault, because Dropbox expects the directory to exist at the preconfigured path, otherwise it can not sync.

What you probably want to do is: Create a vault which is stored inside your Dropbox directory. Then move all the other contents (at least the confidential ones) into the vault.

Thanks for your information and help