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James.Hoving. I share with you that Windows is a pile of Crap and that "the explorer has turned into an ergonomical nightmare with more focus on looking cool than on being a good tool for file handling...."
But this doesn't fall in the category of a bug. Possible in the category of crappy design.. but what if you show the same "problem" in youtube but assiging different (more real) names to the folder and lets see the difference.
You get the same problem with different names, it is true that the dialog will give you a warning about what is about to happen but most ppl just click OK in the dialog without reading its content anyway...
And if its not a bug then it is by design, if it is by design that would mean that someone at Microsoft sat down and thought out a way to confuse the users to make them delete/copy/move the wrong files. I find that highly unlikely.
And for the record, I do not really think that Microsofts products are crap. There politics are and that messes things up for everybody. Microsoft is like a gourmet kitchen where you have master chefs working on the meals, but the guy how serves them _LOVES_ chocolate syrup and sprinkles and likes to "improve" on the dishes before they reach the customers. :-)
You don't sell the OS. The applications sell the OS, MS need to realize this.
Less tween toy and more application platform NOW! I would buy a "Windows 7 Core Edition" with an "old school" explorer and no Aero or extra crap any day!