Traverse Folder allows or denies moving through folders to reach other files or folders, even if the user has no permissions for the traversed folders. Traverse Folder takes effect only when the group or user is not granted the Bypass traverse checking user right in the Group Policy Management Console. By default, the Everyone group is granted the Bypass traverse checking user right. (Applies to folders only.)
Execute File allows or denies running program files. (Applies to files only.)
Setting the Traverse Folder permission on a folder does not automatically set the Execute File permission on all files within that folder.