Vista - Reproducible Explorer bug

I'm cleaning up the start menu, which now has too many items, by grouping
like programs (eg all graphics type program start menu folders under a start
menu folder called Graphics, all programming apps under a start menu folder
called Programming Tools, etc). I have to periodically repeat this exercise,
as new versions of programs create new start menu folders and items in the
top level location when they are installed. When moving these updated items,
where the folder already exists in the target location, I find the following
behaviour is reproducible every time when I move the folders in Explorer:

1. Drag the new start menu folder created by installing the program update
onto the folder where I group such programs

2. Click Continue in the dialog saying that I need to provide administrator
permission to move the folder.

3. Click Continue in the UAC dialog

4. Click Move and Replace in the Move File dialog after checking the "Do
this for the next n conflicts" box.

This moves all the icons that were in the folder to the same named folder in
new location, but it leaves the original now empty folder in its original
location. If I drag it a second time to the same location, going through
steps 1 to 3 again, it then disappears from the original location.

This would seem to be a bug. I'm running Vista Business x86, with all
Windows Updates installed, on an HP business desktop.

Nick