fpm build
fpm build is used to convert .ftd files in a fpm package into static HTML files. The generated HTML files can be uploaded on github-pages, S3 etc to publish your ftd files.
Regarding Dynamic Features in FTD

ftd files can be dynamic, say they can refer an HTTP endpoint, from where ftd will fetch the content, say JSON, and pass it to ftd document. This happens during rendering, if you use the planned fpm serve, or if the fpm package is published to a fpm-repo.

When using fpm build, the dynamic stuff happens during the build time, and subsequently a static version is only available.

fpm build is only to support the use case where you do not have ability to run custom application (fpm-repo) and do not want to depend on SAAS version, and want to use static file serving to host your website.

.build folder
The generated HTML files are stored in .build folder, which is found next to the FPM.ftd file, in the package root. For now this is not configurable.
.packages folder
fpm build also downloads all the dependencies specified in the FPM.ftd file and stores in .packages folder.