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out.txt in each subfolder with first line of input.txt in that particular subfolder

find + sed solution:

find . -type f -name input.txt -exec sh -c 'out_fn="${1%/*}/out.txt"; sed -n "1p" "{}" > "$out_fn"' _ {} \;

• out_fn="${1%/*}/out.txt" - path to output filename in format /path/to/subfolder/out.txt