[Help-bash] substitution causing issues in ssh to remote host backtick

[Rajeev Prasad]

hello friends,

can someone help understand why 1st is working but second is not?

working:
ssh server10 'for t in `ls /xyz/abc/lmn|grep -v xxx`;do ls /xyz/abc/lmn/$t | 
sed -e "s/some/someelse/";done'

not working:
host=server10
folder=/xyz/abc/lmn
ssh $host 'for t in `ls $folder|grep -v xxx`;do ls $folder/$t | sed -e 
"s/some/someelse/";done'

it seems substitution inside backtick is causing the failure, but i am not able 
to understand why?