Hey @Robert F.41, thanks for posting on our Community!
You're correct, you'll just need to move the folder out of your Dropbox folder to another location on your computer and let the desktop app sync until it's 'up to date' in your menu bar.
And yes, the folder will then be backed up by Dropbox, in case you're moving it to an already backed up folder, like the Documents folder.
Let me know if you have any other questions.