The directory is chosen on the machine where Council is installed, inside the projects directory set during installation.
The name is set at creation and can't be changed later: in Settings → General it is read-only.
Directory projects have limits. The code doesn't update on its own: new commits reach the project after you update the directory and run a new analysis. MR review, auto-review and publishing findings are unavailable because such a repository has no forge. Branch review works if the directory is a git repository.
Click New Project, don't choose a directory, fill in Project Name and click Create without code. The Knowledge, Conventions and AI Chat screens are available right away. Repositories can be added later.