Windows Explorer copy wrongly offers to merge folders

Question

When copying a folder tree to an empty(!) location using Windows Explorer it often complains about folders already existing in the target location and offers a merge.
This is reproducible on all my machines:
Using Windows Explorer
select c:\windows
copy to an empty directory
Windows shows a dialog "Confirm Folder Replace", offering to merge Windows folder with different create date
I posted about this problem a long time ago, but did not get an explanation.
http://social.technet.microsoft.com/Forums/en-US/w7itprogeneral/thread/f44f2402-809f-4a53-a009-df58463a0cac/#49661e88-1eed-43a0-9e74-dedcb07bfc0f

Answer 1

We have just experienced a similar problem for the first time and think we can at least partially explain it.  We are copying the "My Pictures" folder from our c: drive to an external disc drive, where we then rename it with the date appended. 
But when we tried to copy it again a month later, we got the erroneous merge dialog box, just like everyone else.  We tried renaming the old folder (with the date appended) to something completely different, but it didn't make any difference -- we
still got the merge message that said our two different folders had the same name.   Huh?!
We think the problem is related to this:  we saw in one of our Windows 7 books that "My Documents" is just a localized "display" name for the ACTUAL file system name
for that directory, which is just "Documents".  (The connection is made through some hidden Desktop.ini file that points to a system file named Shell32.dll ... don't go there!)
Anyway, this is a "feature" allows us to DISPLAY the name of the "Documents" folder as anything we want, in any language we want, without actually changing the name of the "Documents"
directory in the file system itself.  You can verify this by bringing up an old "DOS" command prompt window and using the DIR command to view the actual directory names in your user profile:  the actual file system directory name is still "Documents",
no matter what you (or Microsoft) has renamed it to be displayed as (in our case, "My Documents").
To our sorrow, we discovered that this property is "inherited" when we copied the "My Documents" to an external drive for backup and then renamed it with a date suffix, ie, "My Documents 2011-03-05".  As it
turns out, we were only renaming the folder
display name.  If we again use a command prompt to look at the directory structure on the
external drive, the actual file system directory name on the backup drive is still "Documents" (!!!!!).
Now, when you try to do a copy/paste of one of these folders, Windows 7 appears to be slightly schizo.  We think it looks at the
actual file system directory names when doing the paste, so (in our case) it sees a sub-directory already named "Documents" in the target folder and decides it's time to put up the folder merger
dialog. 
But when it generates the (erroneous) folder merger dialog window, is uses the local display names for those two folders (which are different).  So you end up with a ridiculous looking message
which, in effect, says "Your target already has a folder named "ABC" so do you want me to merge folder "DEF" into it?"  But at the file system level, it thinks you're trying to copy a directory named "Documents" into a parent folder that already
has a sub-directory with that same name.
We can even "catch" Windows 7 erroneously using the actual file system directory name if we click-hold-drag (in order to move) our renamed "My Documents 2011-03-05" folder from one folder to another folder on the external drive. 
The move operation works fine, BUT after the move, the name of the "My Documents 2011-03-05" folder has been altered to display as, you guessed it, simply "Documents". 
Yikes!!! Since when does a simple click-hold-drag to move a folder also RENAME that folder?
So far, we've only caught this happening on directories/folder-names that ship with the OS itself, such as "Documents"/"My Documents", "Pictures"/"My Pictures", etc.  It did
not happen with a "Windows Live Mail" directory that we are also periodically copying to our external drive, presumably because Windows Live Mail 2011 was installed separately from the OS.
Well, we don't think we can fight this bug, so we're switching to a new strategy for our backups.  We now create a new folder on the external drive with the backup date in it, ie "2011-03-05" and then copy the "My Documents",
"My Pictures" , etc. etc. folders to that new "dated" backup folder.  This avoids duplicate subdirectory names going into the same folder, and lets the OS call the copied folder name a-n-y-t-h-i-n-g it wants to!  Plus
we don't have to append the date to the copied backup folder names any more.  As an added bonus, when we see that the "2011-03-05" backup folder is so old that we don't need to keep it anymore, we can just delete that folder and all of its subfolders
and files, and that backup is history.