Overview
Folia groups nearby loaded chunks to form an "independent region." See the PaperMC documentation for exact details on how Folia will group nearby chunks. Each independent region has its own tick loop, which is ticked at the regular Minecraft tickrate (20TPS). The tick loops are executed on a thread pool in parallel. There is no main thread anymore, as each region effectively has its own "main thread" that executes the entire tick loop.For a server with many spread out players, Folia will create many spread out regions and tick them all in parallel on a configurable sized threadpool. Thus, Folia should scale well for servers like this.
Folia is also its own project, this will not be merged into Paper for the foreseeable future.