This function isn't only able to rename files, but also folders. And it is not only able to rename them, but also move them, and, in the case of folders, their contents as well (so folders don't have to be empty to move). For example:
<?php
ftp_rename($conn_id, "./dir1/dir2/", "./dir3/");
?>
Now the folder dir2 (which prevously was in folder dir1) has moved to the same folder as dir1, and it has kept its original contents (the content just moved along).