Hi @obikes
Thanks for posting your question and the screen captures. The project appears to be a legacy project. Currently, you can’t change a legacy project to a Folder-Level project. You’ll need to create a new Folder-Level project. Please refer to the attachment in this post Autodesk Resource: Using Fusion Team and Folder-Level Project in the Classroom.
Since your students are already members in your Team, you won’t need to invite them to your Team again, you can just select their names from the list and assign them roles to folders. Note that subfolders inherit the role of the parent folder or the role set at the project level. This is why I recommend not assigning roles at the project level. See the image on page 14 of the PDF.
Does this help?
-Dan

Dan Banach
Sr. Technical Manager & Community Manager
If my post resolves your issue, please click the Accept Solution button.