All items from a collection appear in their “No Folder” folder. If a user has write access to the collection then they can change the item’s folder (along with all of its other settings of course). However, if a user has Read Only access to the collection then they can’t change the folder of any of that collection’s items. The end result is that all of the Read Only access collection’s items are stuck in the Read Only user’s No Folder forever.
Please give users the ability to change the folder of items in a Read Only collection.