Edit: I first wrote the message below ... but actually you're right, it seem to be a bug.
You can create folders in / .... these folders are visible but inaccessible in the root ... and they are visible and accessible (really created) in /HFS/
I precise: for my test c:\file\HFS is not the folder of hfs.exe... just a folder like as your example.
I have succeeded to reproduce this bug with an old template, but not with the default tpl. With the default tpl, folders are created in the hfs.exe folder (same bug but another manifestation of it).
By cons HFS would display the three tabs: Acces Upload and Delete in the properties of /root, in both case.
Its not a bug.
Example:
If I link (bind to root) a folder named "/myfolder" to the root, this folder and its entire contents (subfolders and files) is "unfolded" to the root, but still belongs to /myfolder.
So a user which has permission to create subfolders in /myfolders, can create folders and subfolders in /myfolders and in all its content, although apparently this content seem to belong only to the root.
/root
myfolder (bind to root) > user can create new folder in it
aaa (subfolder of myfolder) > user can create new folder in it
bbb (subfolder of myfolder) > user can create new folder in it
file.xxx (file in myfolder)
aaa and bbb aren't created in / but are created in:
/myfolder/aaa
/myfolder/bbb
A user with rights on myfolder, therefore has the same rights on all reals folders of this folder even "linked to root".