The actual data can reside anywhere on the hard drive even be fragmented across several sectors. The directory structure is only a logical representation of the stored files, as provided by the Operating System.
However, it is not possible to scan only particular folders for lost or deleted files. The software even allows users to scan specific folders and recover data. It supports quick and deep scan modes for recovering deleted files from internal and external storage devices. Recuva is a decent data recovery software for Windows that allows you to scan and recover deleted files and folders for free.