After removing a host from vCenter, then re-adding the host, all VMs from that host appear under "Discovered Virtual Machines" in the VMs & Templates view.
This is expected behavior. The folder structure for VMs and Templates view is maintained solely on the vCenter Server, and when a host is removed, the vCenter Server does not retain any information about the objects on that host.
VMs will need to be manually moved back to their original VMs & Templates folder locations.