The Course Menu in an Original Course, located on the left sidebar, becomes the Course Content area in Ultra, located in the center page, where you build and manage your course resources. Therefore any content on that Original Course menu – Start Here, Syllabus, Course Materials – becomes a top level folder in an Ultra Course.
What does this mean? If you started building content within Course Materials in your Original Course, we now have another layer to consider.

will produce Folder 1A/Labs/Lab 1 in an Ultra course.
To avoid this extra layer, create your content from the course menu. You can also use the Document in an Ultra course to present folder-type content with attachments and links in a clean, attractive and organized way.