vendors folder confusion

This has bothered me since I dont want to get into bad habbits.
In the main introduction to cake it states that the root level vendors
is for the third party libs.
So I dont get why then there is another vendors folder inside the
application folder - app.

Does it matter where libs are placed and is down to developer to
choose, or is the framework checking a folder for any items inside
automatically ?

I'm trying to get amf installed and dont know which one to choose.

Also If I was running a joomla website side by side where that should
go.
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