Terraform states I am trying to initialized file in an empty directory - terraform

Question

Terraform states I am trying to initialized file in an empty directory which is my local profile: C:\Users
c:\users\a874193\kplabs\sectiontwo.
When I run an ls command it shows the tf file in there and when I look at the .tf file within the actual \sectiontwo folder it does show a more or less empty .tf file.
I am very new to TF, so please break it down to me. Thanks
provider "aws" {
region = "us-west-2"
access_key = "---------------"
secret_key = "----------------------"
}
resource "aws_instance" "kelec2" {
ami = "ami-0d593311db5abb72b"
instance_type = "t2.micro"
}
resource "aws_eip" "elastic" {
vpc = true
}
With the above I have tried to comment out the 2 resources specified, I also replaced all of this with just this:
terraform {
required_providers {
aws = {
source = "hashicorp/aws"
version = "4.37.0"
}
}
}
Result when trying to run terraform init:
PS C:\Users\a874193\kplabs\sectiontwo> terraform init
Terraform initialized in an empty directory!
with Terraform immediately by creating Terraform configuration files.
Result from ls:
PS C:\Users\a874193\kplabs\sectiontwo> ls
Directory: C:\Users\a874193\kplabs\sectiontwo
Mode LastWriteTime Length Name
---- ------------- ------ ----
d----- 29/10/2022 18:04 .terraform
-a---- 29/10/2022 18:04 1152 .terraform.lock.hcl
-a---- 29/10/2022 18:43 310 attributes.tf.bak
-a---- 29/10/2022 18:44 156 terraform.tfstate
-a---- 29/10/2022 18:44 15786 terraform.tfstate.backup
PS C:\Users\a874193\kplabs\sectiontwo> ls
Directory: C:\Users\a874193\kplabs\sectiontwo
Mode LastWriteTime Length Name
---- ------------- ------ ----
d----- 29/10/2022 18:04 .terraform
-a---- 29/10/2022 18:04 1152 .terraform.lock.hcl
-a---- 29/10/2022 18:43 310 attributes.tf.bak
-a---- 29/10/2022 18:44 156 terraform.tfstate
-a---- 29/10/2022 18:44 15786 terraform.tfstate.backup

Answer 1

EDIT:
OK, I ended up adding just the kplabs folder which then showed the sectiontwo folder within the left hand pane.
It has init and produced the correct plan resources.
I think I am getting confused with the folder structure so if anyone can make any sense of why it only works when adding the kplabs folder and not the sectiontwo within the kplabs I would appreciate it.
Thanks