Thank you for your report. You may restore your live bookmarks from auto-backup. I'll fix it in the next update.

Bookmarks Manager does not remove empty system folders. If BM did not remove other folder please notify me.

UPD. Because rss-feeds in Firefox have type "folder" there is no way to exclude it from removing. But in version 0.0.2 of Bookmarks Manager I added a feature to save your rss-feeds by title. Please update your extension (add extension to your browser again).