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They're given names such as ProgramFilesFolder. In addition to using them in your Directory elements, you can use these names anywhere that other properties are used. Also, any directories that you create with Directory elements are also available as properties. The directory's Id attribute becomes the ID of the property.

From

Cover of WiX 3.6: A Developer's Guide to Windows Installer XML

Note

Id value given to <Directory> element can be used as property.