fatal: Not a valid object name: 'master'

Question

When I git init a folder it doesn't create a master branch

This is true, and expected behaviour. Git will not create a master branch until you commit something.

When I do git --bare init it creates the files.

A non-bare git init will also create the same files, in a hidden .git directory in the root of your project.

When I type git branch master it says "fatal: Not a valid object name: 'master'"

That is again correct behaviour. Until you commit, there is no master branch.

You haven't asked a question, but I'll answer the question I assumed you mean to ask. Add one or more files to your directory, and git add them to prepare a commit. Then git commit to create your initial commit and master branch.

Git creates a master branch once you've done your first commit. There's nothing to have a branch for if there's no code in the repository.

First off, when you create a "bare repository", you're not going to be doing any work with it (it doesn't contain a working copy, so the git branch command is not useful).

Now, the reason you wouldn't have a master branch even after doing a git init is that there are no commits: when you create your first commit, you will then have a master branch.

You need to commit at least one time on master before creating a new branch.

^{copying Superfly Jon's comment into an answer:}

To create a new branch without committing on master, you can use:

git checkout -b <branchname>