How do add "Recent Folders" item to the Finder sidebar?
Use a smart folder. 


Right click the Finder in the Dock
Select New Smart Folder
Press the plus button
Select kind. 
Select Last Modified/Opened or whatever you want. 
Select 'This Mac' 
Save your smart folder. When saving, make sure 'Add to Sidebar' is checked. Name your smart folder and you're good to go!