Spartan,
Most modfoldered mods probably tell you, in the instructions, that it is best to make a copy of the game files for the mod to sit under even though it is not necessary for the mod to work. Vanilla must remain clean even after installation.
It is the purpose of a modfolder to leave the original game intact to 1. allow you to play vanilla and 2. to allow other modfoldered mods to work underneath it, side by side so to speak.
Placing all the files in a modfolder would create enormous filesizes - indeed, such a method would be little different to actually copying the game each time and installing a non-modfoldered mod.
The answer is, as said, to keep 2 copies of rtw - your personal copy and your clean copy which mods can draw off to run.
Best modfoldering guide is here: https://forums.totalwar.org/vb/showthread.php?t=44332
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