This topic rates high when searching for a fix, so if someone is still looking after having tried the other solutions, I just had this problem on my Win10 and Win7 and am going to post it here for future reference.
Contrary to all the tutorials I was following, DO NOT click 'Run as administrator' on xplorer360, just double click it like any old thing and it should transfer folders fine afterwards. I don't why this is happening, but I confirmed it on both my laptop and PC and two different flash drives.
Go figure.