folder.ico

Windows icon Reference

An .ico file contains an image in the ICO format, the icon format of Windows. One file holds the same image in several sizes and color depths. Windows selects the best variant for the screen and the context. Applications, folders, and shortcuts show their icons from these files. The related .cur format holds mouse cursors.

A file extension is only a part of the file name. It does not give a guarantee about the format or the content of a file. But on Windows, the extension selects the program that opens the file.