The RootFolder attribute on the Batch element controls the folder of the item. This can be used to access a sub-folder. The structure is Lists/list/folder where folder is optional.
For example, if the list being updated is Contacts and there are two sub-folders Work and Personal. To update an item in the Contacts list:
<Batch OnError="Continue" PreCalc="TRUE" ListVersion="0" RootFolder="/Lists/Contacts">
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And to update an item in the Work folder:
<Batch OnError="Continue" PreCalc="TRUE" ListVersion="0" RootFolder="/Lists/Contacts/Work">
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