Before LW started doing this, so many people were complaining that their downlds were not listed in the Library window. Not everybody shares their downld folder (generally called 'Shared' by default.) So LW brought this concept in. You'll notice also that these items are probably coloured red meaning they are not being shared. The Saved Files folder is purely an psuedonym for the LW downld folder alias Shared folder.

Personally I think it's a great idea. There's lots of people who don't even know what their downld folder is called. lol