The Code Folder is one of the core folders in the CryEngine. It hosts all the Engine code as well as the game project code such as GameSDK. This is where you should place your game project.
A variety of file types can be found here which can be grouped into three categories:
WAF Module Files
Example of a wscript that simply instructs WAF to search in MyModuleFolder and MyOtherModule folder for further wscript files, relative to this wscript itself.
WAF File List
Compilation and project relevant files
Compilation and project relevant files are files of any type that are relevant to your project. In-order to make them visible and add them to the WAF build chain, compilation relevant files have to be added to the file tree files (*.waf_files) of the relevant module.