The Fonts folder debuted with System 7.1 and was one of those folders that should have been present earlier.
Before the debut of the Fonts folder, all fonts had to be stored inside the System file. The presence of the Fonts folder relieved the System file, and slimmed it down considerably. Also, if the System file had a problem, the Fonts folder would remain unaffected -- which was not the case before the dawn of the Fonts folder.
The Fonts folder could accommodate the following fonts:
The maximum number of font suitcases or font files that can be stored inside the Fonts folder is 128 in number. A combination of individual font files and font suitcases can be stored, which means that the total number of fonts on a Macintosh is not 128 -- more fonts can be stored inside a single font suitcase.
With Mac OS X, numerous more copies of the Fonts folder cropped up on your Mac. There was now individual Fonts folders for: