Create a development subfolder for my WordPress website

I’d recommend against using the same database for both. Primarily because the permalink structure would really only work for one, but also because it’s very likely you’d make a change in the dev site that adversely affects your production site. If you decided to attempt something like this, all your media would still be tied to it because media is added to your database the same way posts and pages are, but instead are called attachments.

I’d look into WP Migrate DB to be able to pull in your site (or just your posts). However, you could simply import your old posts into a fresh install of WordPress and go from there.

Good luck!