Finally solved this by hacking the source a bit.
Problem must originate from an old installation where the link wasn't in place.
So what I did was copy all the blocks to the directory, and running the Remove folder. That copied all the blocks, but could not remove the folder.
Then I removed the check of no of data moved, and let the code save the config after removing folder.
Now all looks fine, but I would recommend some test for removing folders, but especially some more informative error messages would be nice