Is this homework of some sort?
By default, GNU ls will quote entries containing certain special or unprintable characters. For example, if a file name contains the space character, GNU ls will print e.g. 'hello world'. This quoting is done using Bash syntax.
In Bash, 'folder'$'\003' (or $'folder\003') represents the text folder followed by octal byte 3. Because you use Fish instead of Bash, this doesn't work—it has a different syntax to specify unprintable/special characters.
I can tell you how to refer to this file in Fish, but I hesitate to do it if it's for homework. What I will do is point you to the part of the Fish documentation where this is (kind of) explained: in Fish for bash users#Quoting.
The default output itself is pretty definitive, assuming you are indeed using GNU
lsand don't have theQUOTING_STYLEenvironment variable set. https://www.gnu.org/software/coreutils/manual/html_node/Formatting-the-file-names.html explains all this (including your options) and more.