[rant #1 REPEATED]
The use of "lazy regex," specifically the :kaioken: EVERYTHING :kaioken: atom, (.*), and its close relatives, is the NUMBER ONE coding error of newbies BECAUSE it is "greedy." Unless you provide an "exit" from your redirection, you will ALWAYS end up in a loop![/rant #1]
Sorry, you are NOT specifying a folder with (.*) but matching EVERYTHING (or NOTHING). That's been the problem and it's still the problem.
Once you finally get into your folder2 directory, DirectoryIndex index.php will specify that index.php will be served if only the directory is requested.