The only property of a folder that you can change in the UI is the title. Changing this property doesn't update the version, and, the Version History button is greyed out for folders. So SP certainly doesn't track versions of folders out of the box, I don't know if it's possible to do something with an event receiver in code to forcibly update it or not.
Document Sets have versioning capability and may suit your requirements, though they are not available in Foundation if that is what you are using. I've not seen something authoritative that says "Folders don't support versions", but it's certainly implied that that's something that document sets give you that folders don't.