Hiding folders from other programs

The proper way to do this is don't make a single app solving everything including problems not related to the app itself.

There are two distinct separate problem here: An app that wants to manage images (that shouldn't question about folder nature, since they belong to the operating system) and the need to "secrete" the images and related management structure to the OS itself.

Now, if your app just manage images without having to save proper data structure I suggest you not to make any strang folder manage in your app, but afford the "secreting folder problem" in another distinct app.
This second app should be a shell extension[^] that access what for the OS is an encrypted file exposing to the OS itself as it is a folder one the user "unlocked" it.
If encryption is not a need, compound files[^] can also be a valid open data structure.
This way you end up with a more general and universal "strongbox" tool, and a simple and general "image editor".

If these functionalities are strongly related (that is: your app needs to store some proper information along with the images it manages) than consider the idea to use compound files[^]: you app will consider what for the OS is a file as a folder containing lot of things for itself only.

Not sure what folder lock does, but my guess is it corrupts the directory structure so the locked folders no longer appear in the list, just like deleting pointers from a tree to prevent you looking at the data they point to. The software then provides you with an alternate way to access the folder, because it knows where it's stored.

This is dangerous for several reasons though:

1. backup software will not find such folders either, so you (or more to the point, the user) won't be able to make backups
2. Depending on how exactly you hide the folder other software using similar low level mechanichs (e. g. a defragger) might corrupt the data, because it doesn't know there actually is meaningful data in that location
3. Uninstallers will fail to free this folder, unless you provide an Uninstaller of your own
4. Users won't be able to exchange stored files with other, legitimate users, or with other programs (whether or not this makes sense is not for you to decide in a time where plugins are the rule rather than the exception...)

In short, I'd advise against it.