In short:

In more detail:

1. Long press bubbles to move them into the Tile folder (or any folder if the tile folder has not yet been created):

2A. If the folder appears as a tile symbol you can skip to step 3.

2B. If it still appears as a regular folder, long press on it to edit:

Then  assign it to the tile (scroll down for the option):

3. After you created the tile folder, you can go ahead and add the Bubble Cloud Folder tile:

Use the Wear Cloud Editor to move bubbles to and from the Tile folder:

1. Open Wear Cloud Editor
   

   

   

2. Tap on the cloud designator icon on the left side of the bubble’s row (legend: star for favorites, button for archive, X for hidden bubbles, or you will see the folder’s icon if the bubble is already in a folder)
   
3. Change which cloud you want the bubble to go into. The Tile folder will be one of the clouds listed there:
   

If you don’t see a folder tile in the list of clouds:

1. Create a folder:
   
2. Assign it to the tile: