Is a Custom SQL Query considered as non-folded?

Anonymous If you use SQL code for importing data then Query Folding breaks, however what you can do is first create a connection to the database in PQ and then add a new step that will use the function Value.NativeQuery

let
    Source = Sql.Databases ( "autumn\sql2019" ),
    ContosoRetailDW = Source{[ Name = "ContosoRetailDW" ]}[Data],
    //Query is now folded                     
    EnableFolding = 
        Value.NativeQuery (
            ContosoRetailDW,
            "SELECT * FROM DimProduct",
            null,
            [ EnableFolding = true ]
        ),
    FilterRows = 
        Table.SelectRows ( 
            EnableFolding, 
            each [ProductKey] <> 3
        )
in
    FilterRows

But I would suggest you create a View so that you can add an additional layer between tables and PQ, makes it easy to govern and DBA would know if a View depends on a table and will modify accordingly.