You can't change the directory name if you want to use the KIM. If you are okay applying hotfixes and updates manually, then go ahead - it won't affect the application at all.
However, if you want to continue to use the KIM for updates, you can still change the project (CMSApp.csproj) name so that it shows up differently in your solution in Visual Studio.
I have tested renaming the project file and applying hotfixes (in Kentico 12) and there are no issues.