OK. The fix involves modifying the registry. You can do it yourself or use a downloaded .reg file. Manual instructions and a .reg file can both be found here:
http://www.winhelponline.com/blog/shell-folders-merged-music-videos-same-folder/
If you use the .reg file, it will folders you have moved to their original location, but will not delete your new folders or move your files. But after merging the .reg file, the Location tab and Move button should allow you to make your desired changes without any problems.
Good Luck,
Keith