What does the 'Remember Last Folder' actually do?

I would have assumed that if would remember the last folder of the last file I had open?

So, I have a file open from 'folder1', close the editor, re-open, when I click to open a file I would expect focus to be on that same folder?

It seems to revert back to any previous folder.

[Edit] To get it to open from the last folder used, you have to click to open the same file twice.