ISO images are faster and have better compatibility than folder games.
Also ISO is the unique format supported to play games on exFAT/NTFS, which is not your case.
Another advantage of ISO is that it is easier to check its integrity.
Folder games was the original method of backup. It has black screen issues with some games.
The speed difference is more noticeable in games that have several hundreds of files.
In most of the games the speed difference is minimal.
If your games plays at an acceptable speed and they don't have the black screen issue, you can leave them in folder format.