Hello,

If you create a portal site, then no physical files are used. I think, you are mixing some things together. The given folder is created when you save virtual files to the file system (e.g. if deploying to a medium trust environment). Otherwise, these files are virtual and used as a template for creating pages in the system (in this case it is a master page template). Please check our documentation for more information about those templates. Particularly I would suggest the chapter about the master page concept, creating a new page template and about editing master pages.

Best regards,
Boris Pocatko