All the AutoModpack files are kept inside ~/automodpack/ folder.

Server

Modpack is generated from files inside ~/automodpack/host-modpack/main/ and/or syncedFiles (read config) which both translate to ~/.minecraft/ (root minecraft instance) folder on client.

Modpack generation means creation of ~/automodpack/host-modpack/automodpack-content.json which contains metadata of every single file of the modapck. You should NOT touch this file manually, edit config instead.

Client

All of downloaded modpacks are kept inside ~/automodpack/modpacks/.

All the selected modpack files are copied to ~/.minecraft/ besides mods (with some exceptions, due to mod loader limitations)

If detected, AutoModpack also tries to get rid of most of if not all of duplicated mods from your standard mods folder in favor of AutoModpack's mods folder.

Why separate mods folder?

Mods are separated for three reasons mostly. Such approach mitigates common drawbacks of placing all modpack mods into the standard mods folder, like:

1. This way if you (as a modpack/server admin) accidentally make a bad update which would normally make game crash on launch and require manual intervention, you can fix it remotely because modpack is updated before it's loaded, that's not possible to do when all mods are loaded immediately by loader in the default mods folder.
2. We can update modpack without requiring restart all the time, if there's a pending update while you were not in game, on launch early, automodpack can update modpack and load it afterward thanks to that you don't need to reboot the game to apply updates.
3. Separation, it's just cleaner this way, you know exactly what mods you have added yourself (client side) and which not - Yeah, there are exceptions due to loader limitations but overall it's cleaner this way.

If you really need to load some mod from the standard mods folder, you can use forceCopyFilesToStandardLocation option in server config to force specific mods to be copied to standard mods' folder.