Copy filenames is for copying the names of selected files/folders. If you're viewing an empty folder (or don't have anything selected) then it'll be greyed out.
If you want to copy the current folder's path to the clipboard, as a normal path, then this button is the nicest way to do it.
If you want to copy the current folder's path to the clipboard as a URI then you can do that by right-clicking the "hot path" for the folder, just above the file list, (or the breadcrumbs bar, or a folder tab's label), then use the "Copy filenames" commands. I don't think the commands are in the right-click context menus by default but they're easy to add. If you want to, copy what's in the Edit > Copy Filenames menu into the All Folders filetype's context menu.