Elements 11: saved version treated as a new file

Question

When I edit a picture and save the result (using either "save" or "save as" and making sure there are ticks in "Save in Elements Organiser" and "Save in version set with original"), the edited copy is often (perhaps 3 times out of 4) treated not as a new version but as a new file. When I close the edit, I am told that there is a new file in a watched folder. When I accept this, I am offered any tags which were applied to the original (which helps a bit) but then have to find my way to the edited file and the original, and manually make them into a set. This is a real pain- it adds a couple of minutes to each edit. I am using Photoshop 11 on a Windows 8 laptop with a 1000GB hard disc (with about 100GB free). My catalog is quite big- about 70,000 items. I am a long-time Elements user (since the original?). This problem is fairly new (ie months not years)- certainly since I moved to V11. This is independent of the format of the original (in my case, RAW or jpeg) or the edited file (in my case usually jpeg).
Message was edited by: PaulRichardKingston- added a sentence about file format.

Answer 1

I'm now on Elements 12, and the same problem is back only worse. When I edit a pictures and save as version set, 9 times out of 10 the edited picture is treated as a new addition to the catalogue. So I try the method that worked with Elements 11- switch off "Watch folders". When I do this the saved picture simply disappears- it isn't saved as version set, and it doesn't pop up as a new picture. After trying this with ten pictures, I retrieve the updated pictures by using file/Get photos and videos/from files and folders, pointing at the relevant folder. They are there, so I retrieve them and individually add them to a set with each original. But this is a long-winded way of doing what Elements should be doing for me automatically. I try closing Elements and re-starting, but that doesn't help.
The curious thing is that when I switch watched folders back on, Elelements just very occasionally does the right thing- it saves the updated picture as a version set. About one time in ten, but at random.
This does look to me like a performance-related problem.
I'm running Elements on a Windows 8.1 system, with hardware Intel Core i5 and 8GB memory, and a one terabyte hard disc (it's a Lenova ideapad laptop). The picture folder hierarchy is big- currently 658GB. I do make efforts to prune it, and plainly if I was able to devote a solid week to doing this could bring the size down significantly. My main camera has a 24MP sensor and I often use RAW, which doesn't help (though I usually delete the RAW after my initial editing session on each group of pictures). Would it help to do a major pruning exercise? People when I raised this before thought not.
Any ideas? This problem is a real pain- nine times out of ten when I do an edit, I have to bring the edited picture in as new, find it amongst the group with the relevant tag, and make it into a version set with the original..