If a restart of the SFTP server help, with no change on client side, then it does not seem to be client (WinSCP) issue, but server-side issue. We cannot help you with that.
If you post session logs files (and screenshots) with different results (without and with the subfolder) before and after server restart, we can take a look. But I do not expect this helps anyhow. Make sure you use the same local machine each time (you screenshots seem to be from different machines).
If you post session logs files (and screenshots) with different results (without and with the subfolder) before and after server restart, we can take a look. But I do not expect this helps anyhow. Make sure you use the same local machine each time (you screenshots seem to be from different machines).