In case that you want to select some specific folders you can use option "Folder(s) Selection":
First select drive where you want to select folder and in list of folders you will see all folders that belong to root of that drive.
By click on folder you will select it and now you have to click on to include it in list of selected folders.
Button is used to remove selected folder from list of selected folders and button will remove all selected folders.
By entering string(s) in Exclude Strings list you can specify which file and/or folders should not be included in search&replace process. This is useful, for example, when you have backup folder that should be skipped or if you know some particular documents that should not be processed.
In case that you have network locations which are visible in Windows Explorer but they do not appear in drives drop-down you can try to find them over "Select extended network drives": For example, location named File (created with Add a network location):