Hi @janettew, let's jump right into this!
Is the Dropbox desktop app installed and running on your Mac at the time of the deletion? Can you also clarify the precise error message you get on your end, when trying to delete the folder?
As for the red icon, it seems this isn't coming directly from our end, since this isn't an official Dropbox icon. However, I did some re-search and it might be related with Apple, and the permissions you have in the folder.
Keep me posted!