Is it possible to scope Firebase functions to a folder inside a storage bucket?

You may check inside the function. Get the "filePath" or "fileDir" on your function and check if it is the folder you want.

const path = require('path');
const filePath = event.data.name;
const fileDir = path.dirname(filePath);

//if you want to check the posts folder only then:

if (fileDir != 'posts') {
    console.log('This is not in post folder');
    return null;
}

firebaser here

There is currently no way to trigger Cloud Functions only for writes in a specific folder in Cloud Storage. If you want to limit the triggering to a subset of the files in your project, putting them in a separate bucket is currently the only way to accomplish that.

As a workaround, you can write metadata about the image to a supported database (Realtime Database or Cloud Firestore), and use that to trigger a Cloud Function that transforms the file. This is what I usually do, as it also allows me to capture the metadata in a format that can be queried.