On Android, by default apps can access each other files. This is not secure, as you may have files that are not meant to be shared with anyone else. That's where 'Private downloads' come handy.
'Public downloads' is a regular folder on your device, which is seen and used by other apps and file managers (including file transfer to PC). Could be SD card folder.
'Private downloads' folder is stored inside Aloha app and is completely private, encrypted and secure. You can store your sensitive files over there.