proper way to undo AVCHD mess?
It's possible that with certain Panasonic or MTS-specific software, the associated files are useful. I've heard of situations where Premiere won't import the footage correctly without the full folder structure. I don't have any MTS folders here at the moment to verify for sure, but it's most likely just metadata that the camera recorded. 

That being said, I've never had an issue importing an MTS file disassociated from its associated files (and I do this for a living). Fortunately, the associated files and folders are relatively small and don't take much space, so it's usually more trouble to weed them out than it is to remove them. 

I'm assuming you're editing in Final Cut, as the rest of the major NLE's can handle the AVCHD codec, and an MTS wrapper, natively. Final Cut's Log and Transfer does a fine job with the transcode and you won't lose anything significant.

If you're using another NLE, the best transcode codec you can use is ProRes, as it's fairly universal and a very high-quality codec. I've also seen guys use DNxHD for visually lossless transcodes, but it's a heavy codec and some machines may have trouble playing it at full speed. Unfortunately, on Windows you're out of luck with ProRes altogether as it's Mac-only.