This is how it looks for me. I'm not sure how the setup instructions could be missing from your download o_O. You could try downloading again. If they're still missing, but you still have the loot tables folder, just copy the loot_tables folder into the data folder of your minecraft save.
I've tried moving the loot_tables folder into the data folder but the mobs still won't drop what the loot tables say they should drop. I don't know what I should do now :/
I would like to ask: How does this mod work?? You can create your own items?
It isn't really a mod in itself. Just a resource pack that makes use of features that optifine has. Optifine can detect special data in items such as their enchantment or display name, and change their textures using a resource pack. The items still behave the same way and have the same stats, just their texture is replaced with a different one.
Can you make stuff just for item frames, like an iron ingot named radiator will make a radiator, and when you put it in an item frame, it looks like a radiator. You could do the same with computers, more paintings, shelves, punching bags and a few more
I would like to, but optifine doesn't let you swap out item models unfortunately. I do have something similar planned for next month's update. More details will come later.
Also just for future reference, you can edit your posts if you want to update them or submit new ideas without making multiple posts. Just click the edit button on the bottom right of your post.