Disclaimer: I tested all of these myself on Windows 10. I could not find an authoritative source documenting all of these behaviours. It is entirely possible that I made a mistake somewhere.
The folder’s last modified time is updated for these actions:
- new file or folder directly in target folder
- renamed file or folder directly in target folder
- deleted file or folder directly in target folder
- hardlink create/delete/rename – same as files
- file/folder symlink create/delete/rename
- directory junction create/delete/rename
It is not updated for these actions:
- modified contents of file directly in target folder
- edit target of symlink or junction contained in target folder
- file’s or sub-folder’s created/modified date changing
- edit basic attributes (hidden/archive/system) of a direct child
- NTFS compression/encryption change of a direct child
- anything at all happening in a sub-folder – literally anything
- changing attributes of the folder itself
- changing owner/ACL of the folder itself
- owner or ACL of a direct child changing
- if the folder is a directory junction, changing the target
- adding/deleting alt data streams to a direct child file