There are several entries, but none quite explain it how I'd like.
When you set up your project template, your folders have permissions. From there, you make your Design Collaboration Teams. Only, the permission levels in Design Collab are 4 levels with Folders having 6. The team creation process will automatically override your permissions in the Folder to a higher level than you want, which means you have to go back to EVERY folder and reduce permissions again.
You can think of it like if I give someone View to my folder to View and therefore link to my model, when the team gets created, it will up their permission to View + Download because Design Collab only has the filled in bubble for View (which is 'level 2') instead of the unfilled bubble (which is 'level 1'). This is an admin nightmare and an access control risk.
Similar to what was said here, but this is only part of it:
Design Collaboration/Folder Permissions - Autodesk Community
