Terminal directory delete issue
You're in the "trash" directory now because when you threw out the folder, your view of that folder in the terminal went with it.  The terminal, being completely inside the directory, doesn't even need to know it's been moved to the trash.  It's pwd doesn't even change because it has no reason to re-validate the current directory path on every interaction - and why should it?  the directory itself is still valid, it just lives in ~/.Trash now.

Directories (or folders) are really just references to spots on a physical disk, so moving folders around your hard drive never changes their disk location, so again, why should the Terminal update?  It doesn't care.

It's a "gotcha" that's been part of linux for 20 years and unix for a great deal longer.