OS: Windows XP
Processing revision 0135

Problem: selecting existing folder/filename is "save as" dialog creates
subfolder.

"Save as". Select a folder which already holds a processing folder. Use the
same name for the file to save, and click "save".
Whereas I'd expect to get a warning about overwriting the existing files,
the folder opens, and saving there creates a new folder with its files, one
level below the existing one.
If you enter the name of a listed folder Windows interprets this as "open
folder" instead of "save" (and overwrite).

The only solution seems to be saving at another location, closing
Processing, and moving the folder.

this isn't something we're controlling or have coded for, we're at the
mercy of what the file chooser dialog returns to us as the selected folder.
as such it's not something that can be fixed. if it were overwriting the
old folder without asking, that'd be a bug that we'd need to take care of.