The menu provides a quick way to view the contents of volumes and a number of standard folders by choosing the item whose contents you which to view. The menu contains local volumes, specific folders, and folder types which can represent multiple folders when there are multiple folders of the same kind for different “domains.”
For example, there is a system Preferences folder:
/Library/Preferences
and the Preferences folder in your home folder:
~/Library/Preferences
If the item chosen from the menu represents a single directory, its contents are displayed in a List window.
If the item chosen represents multiple folders, such as Preferences, the folders themselves are displayed in a List window, where you can expand them to view their contents.