Photos is installed as part of iOS, so you cannot revert to the previous version, unless you restore the iPhone to the previous iOS version.
What do you mean by new two folders? What is new are the additional Memories, Places, and Persons. These new Photos Library items have been highly advertised and promoted by Apple for more than half a year as the biggest improvement of Photos in iOS 10 and macOS Sierra on the Mac. You could have been warned. And there is no way to disable them, sorry. They are created automatically. The new Photos version is built on these new features. Just ignore the new items and create your albums and folders just like before.
The only faces it grouped were stock images of a woman I've never met.
The faces detection is taking a lot of time and will run in the background, when your iPhone is locked and connected to power. In a few days you will probably be seeing more detected persons, even if you do not want them on your iPhone.
You may want to send your feedback directly to Apple. Use the feedback form. http://www.apple.com/feedback/iphone.html