I have the same problem. All configs allow to create a new folder, The images path is set using this way:

 

var imagesPath = EnsureImageGalleryPath();

Editor.SetSecurityImageGalleryPath(imagesPath);
Editor.SetSecurityImageBrowserPath(imagesPath);

The "imagesPath" does exist and allows full control to user Everyone. I tryed to add my own test handler and create a new folder myself (code from InsertImage.aspx):

 

public void CreateDir1_Click(object sender, EventArgs e)
{
    try
    {
        
        System.IO.Directory.CreateDirectory("D:\\MyUserFileStorage\\Serge\\Images\\Test");
    }
    catch (Exception ex)
    {
        throw ex;
    }
}

 

The Test subfolder was created without any problems. But when I'm trying to do the same using you way, the control does not create a new folder. No messages, no errors, no folder.

 

The site path is http://localhost/sitename

Windows 2008 Server R2

CuteEditor 6.6

IE 8, FF 3.6.8

 

Update: 

I can't: visit the subfolder by clicking on it, rename the file.

I can: upload an image, delete a file or folder