If done at the Batch level (by setting the Separation activity's scope to "Batch"), this would remove all folders in the Batch and only loose pages would remain. However, this can be done at the folder level as well. If you have a situation where your Batch has two folder levels but one needs to be removed, Undo Separation will remove folders up to the level specified (i.e. If you set the Separation activity's scope to "Folder" and folder level to "1", all folders below the first folder level would be removed. Any pages in folders below the first level would be appended to the folder level above it.)
|The original Batch with three Batch Folder levels||Undo Separation ran at the "Batch" scope.
||Undo Separation ran at "Folder Level 1" scope.
||Undo Separation ran at "Folder Level 2" scope.