Folder1/Folder2/Folder3/File1then Kate will open it in terminal in the same location say
Folder1/Folder2/Folder3/File1for my given example.
Ubuntu users might find that terminal in disable in Kate. Personally I also face the problem. The reason for the problem is Kate actually build on KDE distribution. Hence if you use the terminal of Kate, you need to install the package
konsolein Ubuntu. So, go to your Ubuntu desktop terminal (Application > Accesories > Terminal) and type the following command :
sudo apt-get install konsole