wp-content/mu-plugins folder question

In your manual, where it discusses setting up the multisite network in wp. One of the last steps is to create a new directory folder in wp-content folder. It states to create new directory named "mu-plugins" before you can add the plugins.

What does that folder do?

What happens if the multisite is ALL set up, working, has plugins installed, BUT that mu-plugins folder HAS NOT been created?

What happens if the above exists, and THEN you create that mu-plugins folder?

Only a couple of the plugins have been activated, and there are no sites added to the network yet.

Thanks,
Tom