It is possible to remove those folders, but in doing so you risk dataloss. So proceed with caution.

Close Netscape completely.
In your profile directory, delete \Mail\Local Folders.
Open the file prefs.js with your favorite text editor and delete any reference to Local folders, especially:

user_pref("mail.server.server2.directory", "C:\\WINDOWS\\APPLICATION DATA\\Mozilla\\profiles\\YourProfile\\xxxxxxxx.slt\\Mail\\Local Folders");
user_pref("mail.server.server2.hostname", "Local Folders");
user_pref("mail.server.server2.name", "Local Folders");
user_pref("mail.server.server2.type", "none");
user_pref("mail.server.server2.userName", "nobody");
user_pref("mail.root.none", "C:\\WINDOWS\\APPLICATION DATA\\Mozilla\\profiles\\DeinProfil\\xxxxxxxx.slt\\Mail");
user_pref("mail.accountmanager.localfoldersserver", "server2");

Note: server2 is just an example. The name might be different on your system (server3, server4, and so on). Save prefs.js and restart Netscape. Local Folders should be gone now. Adjust settings in news server accounts (especially Sent Items).