It says it disables all mods and moves them to mods_old, does that just
mean old dated mods or all mods? I'm using what I believe is updated for patch 1.9, but the game is moving it to mods_old. Has folder structure changed for mods as well?
All mods. There are very few, if any, mods that have been updated to the new patch. Some *may* still work but the risk of them screwing up your game is great.