fullfile is a function to create a path to your image folder. It simply concatenates the strings you give it with the OS-appropriate separator. You can easily write your own code to do that.
imageSet is an object, which manages a collection of image files, and read is one of its methods, which ultimately calls imread. Unfortunately, imread does not yet support code generation. So you would need to refactor the code in the example to separate reading of the image files from the actual stitching, and handle the reading of the files yourself.
The only step method used in this example belongs to the vision.AlphaBlender system object, and that is supported by MATLAB Coder.