The Traverse Folder permission allows or denies the user from moving through folders to reach other files or folders, even if the user has no permissions for the traversed folders (applies only to folders). Traverse Folder takes effect only when the group or user is not granted the Bypass Traverse Checking user right which checks user rights in the Group Policy snap-in. By default, the Everyone group is given the Bypass Traverse Checking user right.
For files : The Execute File permission allows or denies program files the are running (applies only to files).
Setting the Traverse Folder permission on a folder does not automatically set the Execute File permission on all files in that folder.
Hewissa
MCSE, CCNA, CIW