What does a grey icon in remote GitHub mean

git rm --cached <folder_name>

Then go to the parent directory and do:

git add .
git commit -m "<your_message>"
git push --all

It looks like you created a submodule, pointing to an unreachable remote location.

See this answer. That icon, when green, will point to the sub module. I'm assuming it's greyed out in your case because the sub module was incorrectly configured.

Given that .gitmodules is not present, it must have been deleted, leaving a sub module without a remote information.

If go into app and type git remote -v you will see where this module is pointing too. This place is currently unreachable.

In a similar scenario, I added a submodule and deleted .gitmodules. The result on GitHub looks like this:

Git thinks it's a submodule as it has a .git directory inside it. To fix...

Changed directory to the offending dir:

cd <offending git submodule>

Remove the .git directory inside it:

rm -rf .git

Update the git cache:

git rm --cached <offending git submodule>

Go to the parent directory:

cd ..

Add the directory to git:

git add .
git commit -m "Changed submodule to directory"
git push --all

It looks like you initialized git inside the folder. Delete the git file (rm -rf) from the subfolder and create a new repo and re initialize git.