That's the problem, since the Library is set to D:, the whole D: is the Library. You can restore default location without moving the files to fix this:
On the Location tab, select "Restore Default" > "Apply", when prompted to move the files, select "No".
Create a folder on D: to allocate the Library, on the Location tab, select "Move..." and select the folder you just created on D: > Apply, now, manually move the files to the folder.
If this process doesn't work, let me know so we can try another solution.