help understanding file structure for subdirectories

I have watched the video tutorial on this topic but i'm still not certain on how to approach this. In the tutorial video, the presenter just moves a few files from the same folder into the builder and builds it from there with a path that just includes " https://yoursite.com/updates/%file%". This leads me to believe that the builder will only check for files within the updates folder. But what if there are sub folders? do I have to individually specify all the sub folders in my entire project? or will wyBuild know how to navigate through all the subfolders and deliver the patches where they need to go?