Is there any way to edit the default widget and create a new widget out of it?

You can use those as a base for a new widget but can't edit the source files themselves. That said, most of the widget components are available in the images library.

But what if i Just need to use the folder widget tab to make it as navigation button in a different orientation (horizontal wise).
as i like the properties of the tab. (changing color for selection, etc)

For Page Navigation, I'd suggest that it should be fairly simple to build this as a custom widget using the page navigation widgets as its base.