How-To: Remove a deleted folder from Finder Sidebar on a Mac
I had a very stubborn folder that I had on my Finder sidebar, under “Favorites”, because the actual folder on the my Mac was deleted. Because the folder was deleted, I could not remove the “Favorite” by the normal right-click and “Remove from Sidebar” option. It was driving me crazy but a search lead me to an actual simple resolution: just hold down the “Command” key while dragging the folder off the sidebar. This worked perfectly!
https://discussions.apple.com/thread/3048198
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