Additional information from the product team for the blog post from May 21, 2010:
1. Suggested Contacts folder can be deleted by anything other than Outlook 2010, like Outlook 2007, 2003, MFCMAPI and OWA. However, Outlook 2010 will recreate the folder if it is deleted.
Previously I am unable to reproduce the behavior as the Suggested Contacts folder is in the Deleted Items folder. Once I empty the Deleted Items folder, the Suggested Contacts folder is recreated in Outlook 2010.
2. Suggested Contact folder is not meant to be deleted from Outlook 2010. So if you use OWA or MFCPAI or other indirect means to delete the folder, it will not be removed from the Address Book list. Please note that we should not be in that state in the first place.
Thus, please instruct your clients not to delete the Suggested Contacts folder in OWA. If you don’t want to use it, please manually uncheck the option "Automatically create Outlook contacts for recipients that do not belong to an Outlook Address Book."
Hopefully Microsoft provides this option to enable administrators to disable this function for next Group Policies.