If the file is of a type unknown to ClutterKiller, it will prompt you to select a category for it, and organize the file accordingly. If the Auto Learn is turned on in Settings (which it is by default), ClutterKiller will save this category selection for the file type, to the settings, so future files of this type will be auto organized when encountered again. This also means that if you drag & drop multiple files of the same unknown type, you only have to answer the category dialog once.

Folders are handled as single objects, and the category selection will pop up for them every time. Once you select a category, the entire folder will be moved to that category's organizing folder.

If your intention is not to move the entire folder, but rather clean its contents, then you should use the Clean Folder option, not Drag & Drop. You can Drag & Drop multiple folders, but you must answer the category dialog for each one.