If hole cards are folded at whatever street that means, they can't be dealt from the remaining deck right?
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Correct.
In hold'em the situation never arises that they're needed.
In some draw game -- like 2-7 Triple Draw -- it may be necessary to re-use mucked cards.
In a 6-handed game, there are 30 cards dealt, so only 22 left for draws.
If all players were in, and all drew 3 on the first draw, there would only be 4 cards left for the next two draw unless the discarded cards were re-used.
As you might imagine, this is extremely rare.