Depends. If the folder is located in the App/Roaming folder and is literally labeled "temp", you can likely delete it. If the folder is located as specified in Options/File Location/Cover Art, then no, do not delete that.
That said, if you have the checkbox ticked to store cover art in file tags (Options/Library & Folders/Manage Library Fields…/Image File -> Save file in tags checkbox ticked), then that is exactly what MC does - it embeds the cover art into the music file itself. This is what I do myself and this obviates the need for a dedicated cover art folder, or having a individual cover art image files in each album folder. IMO, you still probably shouldn't delete your specified cover art storage location even if storing the cover art in tags, as that folder location functions effectively as a cover art backup in the event of a catastrophic music file loss.
If you do not currently store images in the file and think you'd like to try it, please bear in mind that it will increase each track's file size by the cover art image file size. To me this is a pittance given its size relative to the music file itself, and the small increase is worth it for the convenience.
Auto-import should not re-create already existing album thumbnails.
